Document:

exv10w2w3

Exhibit 10.2.3

[Translation of Chinese original]

EQUITY TRANSFER TERMINATION AGREEMENT

THIS EQUITY TRANSFER TERMINATION AGREEMENT (the “Agreement”) is entered into on this
12th day of June 2009 by and among:

	(1)	 	REDGATE INTERACTIVE ADVERTISING (BEIJING) CO., LTD., a limited liability company duly
established and validly existing under the laws of the People’s Republic of China, with its
domicile at Suite 804, Building 2, 19 Jianguomenwai Avenue, Chaoyang District, Beijing (“Party
A”);
	 
	(2)	 	REDGATE MEDIA GROUP, a company duly established and validly existing under the laws of the
Cayman Islands, and a connected person of Party A (the “Proposed Listed Company”);
	 
	(3)	 	WEIDONG ZHU, a natural person and citizen of the People’s Republic of China whose ID card
number is 310110197006105018 and whose residential address is Flats 801 and 802, Building 3,
163 Puhuitang Road, Shanghai;
	 
	 	 	ZHENHUI WANG, a natural person and citizen of the People’s Republic of China whose ID card
number is 31010219690611525X and whose residential address is Flat 202, 62 Zinan Huayuan
Ercun, Zizhu Road, Minhang District, Shanghai;
	 
	 	 	WENHUA CAO, a natural person and citizen of the People’s Republic of China whose ID card
number is 330102195906230636 and whose residential address is at 25-1, Phase 1, Dahua
Xiqifengqing, Wenyi West Road, Hangzhou, Zhejiang; (Weidong Zhu, Zhenhui Wang and Wenhua
Cao are hereinafter collectively referred to as “Party B”); and
	 
	(4)	 	SHANGHAI YARUN CULTURE COMMUNICATIONS CO., LTD., a limited liability company duly established
and validly existing under the laws of the People’s Republic of China, with its domicile at
D-541, 1 Huyi Road, Shanghai (the “Company”).

(Hereinafter the parties above shall be referred to, individually, as a “Party” and, collectively,
as the “Parties”.)

WHEREAS:

	(A)	 	On April 8, 2008, Party A, Party B and the Company executed the Equity Transfer Agreement and
the Supplemental Agreement thereto (hereinafter collectively referred to as the “Original
Equity Transfer Agreement”) attached hereto as Appendix 1A pursuant to which Party B
transferred 100% of the equity interest in the Company held by it to Party A; on April 8,
2008, Party A, Party B and the Proposed Listed Company additionally executed an agreement (the
Share Issuance Agreement which,

 

 

	 	 	together with the Original Equity Transfer Agreement, are hereinafter collectively referred
to as the “Original Equity Transfer Documents”), attached hereto as Appendix 1B, whereby
the Proposed Listed Company was to issue shares of the Proposed Listed Company or pay a
cash consideration to Party B after realization of the offshore listing and once certain
conditions had been fulfilled.
	(B)	 	Pursuant to the Original Equity Transfer Agreement, Party A and Party B have completed the
procedures for the amendment of business registration in respect of the transfer of the equity
interest in the Company. Having reached a consensus through consultations, the Parties have
decided to terminate the Original Equity Transfer Documents and take all actions required for
Party A to transfer the equity interest in the Company back to Party B.
	 
	(C)	 	Party B (Weidong Zhu, Zhenhui Wang and Wenhua Cao) refuse to execute a non-competition
agreement with a non-listed company.

NOW, THEREFORE, pursuant to currently applicable laws, statutes, rules and regulations of the
People’s Republic of China, the Parties have, following amicable negotiations conducted on the
basis of equality, reached the following agreement:

	1.	 	REPRESENTATIONS AND WARRANTIES
	 
	 	 	Each Party represents and warrants that:

	 	1.1	 	it executes this Agreement of its own free will and is willing to abide by
the provisions hereof; that it has the lawful right and full power and authority to
enter into and perform this Agreement and, once executed, the provisions hereof will
constitute a valid and binding obligation on it;
	 
	 	1.2	 	its execution hereof and the performance of its obligations hereunder and the
execution of any other documents executed pursuant to or in connection with this
Agreement or the performance of its obligations under such documents will:

	 	1.2.1	 	not result in the breach of any provisions of any company’s
articles of association or other organizational document; and
	 
	 	1.2.2	 	not result in its breaching any agreement, permission or
other document, or give a third party the right to terminate or amend any
agreement, permission or other document binding on it, or result in the
violation of any judgment or order issued or rendered by any court or
government agency.

	2.	 	TERMINATION OF THE EQUITY TRANSFER DOCUMENTS

 

 

	 	2.1	 	The Parties agree to terminate the Original Equity Transfer Documents on the
execution date hereof. Matters under the Original Equity Transfer Documents that have
not yet been performed or the performance of which has not been completed on the
execution date hereof shall not be further performed and all of the Parties’ rights,
debts, liabilities and obligations under the Original Equity Transfer Documents shall
be extinguished as on the execution date hereof. Each of the Parties confirms that
there are no disputes over the performance of the Original Equity Transfer Documents
as at the execution date hereof, and the Company and Party B will not assert any
rights against Party A in connection with the Original Equity Transfer Documents.
Other than the transfer of the equity interest to Party B pursuant to Article 2.2,
Party A and its directors, representatives and employees shall not bear any debts,
liabilities or obligations toward Party B.
	 
	 	2.2	 	The Parties agree to execute the Equity Transfer Agreement attached as
Appendix 2 hereto and to the transfer of the equity interest in the Company registered
under the name of Party A back to Party B. Party A covenants that it will take all
necessary actions to cooperate with Party B and the Company in carrying out the
relevant procedures for the amendment of business registration in respect of the
transfer of equity interest. As the consideration in the amount of RMB3 million for
the transfer of equity interest under the Original Equity Transfer Agreement (the
“Original Consideration”) has not been paid, the Original Consideration and the
consideration in the amount of RMB3 million for the transfer of equity interest under
the Equity Transfer Agreement (the “New Consideration”) shall be mutually offset on
the execution date of the Equity Transfer Agreement, i.e. Party A shall not be
required to pay the Original Consideration and Party B shall not be required to pay
the New Consideration.
	 
	 	2.3	 	As the Company was actually operated and managed by Party B, as the
management of the Company, during the period Party A was registered as the shareholder
of the Company, notwithstanding anything to the contrary herein, Party B covenants to
Party A that it will ensure that Party A is not required to bear any debts or
liabilities to Party B, the Company or any third party as the result of any act or
omission by the Company or its management, or subject to penalties, inquiries or
investigations by a government or judicial authority, regardless of whether Party A
had knowledge of or agreed to such act or omission.
	 
	 	2.4	 	The Parties agree that the costs paid by each Party in connection with the
performance and termination of the Original Equity Transfer Documents shall be borne
by such Party.

	3.	 	CONFIDENTIALITY

 

 

	 	3.1	 	A Party (the “Receiving Party”) that obtains knowledge of or receives
confidential information from a Party hereto (the “Disclosing Party”) shall maintain
the confidentiality of such information, may not use such confidential information for
any purpose other than for the purposes contemplated by this Agreement and may not
disclose the confidential information to any party other than a contracting Party (or
a company appointed by such Party (such company shall bear the confidentiality
obligations hereunder, and such Party shall bear the legal liability arising from a
breach of the confidentiality obligations hereunder committed by any company appointed
by it)) without the prior written consent of the other Party. Notwithstanding the
foregoing restrictions, the confidentiality obligations set forth in this Article 3
shall not apply to:

	 	3.1.1	 	information that has entered the public domain other than as
a result of the wrongful conduct of the Receiving Party or its
representatives, agents, suppliers or subcontractors;
	 
	 	3.1.2	 	information legitimately and legally obtained by the
Receiving Party from a third party, provided that such information was not
subject to confidentiality obligations or other restrictions on use at the
time of receipt; or
	 
	 	3.1.3	 	information in written form owned by the Receiving Party,
which is not subject to any restrictions on use or disclosure and was not
obtained for the purpose of executing or performing this Agreement.

	 	3.2	 	Notwithstanding Article 3.1, the Receiving Party may disclose confidential
information to its employees, directors and professional advisors that is reasonably
necessary for the purposes of this Agreement, provided that the Receiving Party
ensures that such employees, directors and professional advisors are aware of and
comply with the confidentiality obligations set forth in this Article. If the
disclosure of relevant confidential information is required by law or requested by a
competent court, regulatory authority or any other such competent government agency,
the Receiving Party may disclose such confidential information, provided that the
Receiving Party shall, to the extent permitted by relevant laws and statutes, take all
necessary actions to ensure that the confidential information is treated as
confidential.
	 
	 	3.3	 	The Receiving Party shall not reproduce any confidential information in any
manner whatsoever without the prior written consent of the Disclosing Party.
	 
	 	3.4	 	This Article 3 shall survive after the termination of this Agreement.

 

 

	4.	 	NOTICES

	 	4.1	 	Any notice hereunder shall be made in writing and dispatched by fax or
registered mail to the recipient’s designated number or address. Notices dispatched
by the aforementioned means shall be deemed received:

	 	4.1.1	 	if dispatched by fax, twelve (12) hours after transmission;
and
	 
	 	4.1.2	 	if dispatched by registered mail, three (3) days after
consignment to the post office.

	 	4.2	 	If Party A dispatches a written notice to Party B pursuant to Article 4.1
hereof, it shall dispatch the same to Party B at the following fax numbers or
correspondence addresses:
	 
	 	 	 	Weidong Zhu
	 
	 	 	 	Fax number: 021-64383327
	 
	 	 	 	Correspondence address: Flat 403, ShengAi Tower, 88 Caoxi North Road, Shanghai
	 
	 	 	 	Attn.: Weidong Zhu
	 
	 	 	 	Zhenhui Wang
	 
	 	 	 	Fax number: 021-64383327
	 
	 	 	 	Correspondence address: Flat 403, ShengAi Tower, 88 Caoxi North Road, Shanghai
	 
	 	 	 	Attn.: Weidong Zhu
	 
	 	 	 	Wenhua Cao
	 
	 	 	 	Fax number: 021-64383327
	 
	 	 	 	Correspondence address: Suite 403, ShengAi Tower, 88 Caoxi North Road, Shanghai
	 
	 	 	 	Attn.: Weidong Zhu

 

 

	 	4.3	 	If Party B dispatches a written notice to Party A pursuant to Article 4.1
hereof, it shall dispatch the same to Party A at the following fax number or
correspondence address:
	 
	 	 	 	Fax number: 010-85263129
	 
	 	 	 	Correspondence address: Suite 804, Building 2, 19 Jianguomenwai Avenue, Chaoyang
District, Beijing
	 
	 	 	 	Attn.: Ying Zhu

	5.	 	LIABILITY FOR BREACH OF AGREEMENT
	 
	 	 	In the event of a breach of this Agreement, the breaching Party shall be liable to
compensate for the losses incurred to the non-breaching Party as result of the breach of
this Agreement by the breaching Party.

	6.	 	GOVERNING LAW AND DISPUTE RESOLUTION

	 	6.1	 	This Agreement shall be governed by, and construed in accordance with, the
laws of the People’s Republic of China.
	 
	 	6.2	 	Any dispute arising from or in connection with this Agreement, including
disputes over the validity or existence of this Agreement, shall be resolved by the
Parties through consultations conducted in good faith. If the dispute is not resolved
within thirty (30) days after a Party gives notice requesting such consultations, any
Party shall have the right to submit the dispute for arbitration to the Shanghai
Arbitration Commission in Beijing in accordance with its arbitration rules then in
effect. The arbitration award shall be final and binding on Party A and Party B.

	7.	 	MISCELLANEOUS

	 	7.1	 	This Agreement is made in Chinese in five (5) counterparts, of which Party A
and the Company shall each hold one original, and each party comprising of Party B
shall hold one original.
	 
	 	7.2	 	This Agreement shall enter into effect on the date that it is duly executed
by the Parties (or their authorized representatives). Any amendment or
supplementation of this Agreement shall be valid only if made in writing and executed
by the Parties (or their authorized representatives).

IN WITNESS WHEREOF, this Agreement is duly executed by the Parties on the date first set forth
above.

 

 

(Remainder of page intentionally left blank)

 

 

Signature Page

	 	 	 	 
	 	

Party A:

REDGATE INTERACTIVE ADVERTISING (BEIJING) CO., LTD. [company seal]

 	 
	 	By:  	/s/ Ying Zhu
 	 
	 	 	Name of Legal Representative: Ying Zhu 	 
	 	 	 	 
	 
	 	REDGATE MEDIA GROUP

 	 
	 	By:  	/s/ Brack, Peter Bush
 	 
	 	 	Name:  	Brack, Peter Bush 	 
	 	 	Title:  	Chairman of the Board 	 

	 	 	 	 
	 	Party B:

WEIDONG ZHU

 	 
	 	Signature:  	/s/ Weidong Zhu
 	 
	 	 	 	 
	 	 	 	 
	 	ZHENHUI WANG

 	 
	 	Signature:  	/s/ Zhenhui Wang
 	 
	 	 	 	 
	 	 	 	 
	 	
WENHUA CAO

 	 
	 	Signature:  	/s/ Wenhua Cao
 	 
	 	 	 	 
	 	 	 	 

 

 

	 	 	 	 	 
	 	SHANGHAI YARUN CULTURE COMMUNICATIONS CO., LTD. [company seal]

 	 
	 	By:  	/s/ Weidong Zhu
 	 
	 	 	Name of Legal Representative: Weidong Zhu 	 
	 	 	 	 

 

 

	 	 	 	 	 

Appendix 1A

EQUITY TRANSFER AGREEMENT AND SUPPLEMENTAL AGREEMENT

[See Exhibits 10.2.1 and 10.2.2]

 

 

Appendix 1B

SHARE ISSUANCE AGREEMENT

 

 

April 8, 2008

Redgate Media Inc.

Redgate Interactive Advertising (Beijing) Co., Ltd.

(  )

and

Weidong Zhu (  )

Zhenhui Wang (  )

Wenhua Cao (  )

SHARES ISSUANCE AGREEMENT

 

 

THIS SHARES ISSUANCE AGREEMENT (this “Agreement”) is made on [ ][ ], 2008

Among

Redgate Media Inc. (“Company”), a company incorporated under the laws of Cayman Islands with its
registered office at Scotia Centre, 4th Floor, P.O. Box 2804, George Town, Grand Cayman, Cayman
Islands, British West Indies;

and

Redgate Interactive Advertising (Beijing) Co., Ltd. (“WFOE Redgate 
( ) ”),
a company incorporated under the laws of the PRC with its registered office
at Room 804, 2nd Building, No.19 Jianwai St, Chaoyang District, Beijing, the PRC;

and

Weidong Zhu (in Chinese “” the “Allottee”), citizen of the PRC, whose PRC identity card
number is 310110197006105018;

Zhenhui Wang (in Chinese “” the “Allottee”), citizen of the PRC, whose PRC identity card
number is 31010219690611525X;

Wenhua Cao (in Chinese “” the “Allottee”), citizen of the PRC, whose PRC identity card number
is 330102195906230636;

The Company, WFOE Redgate ( ) and the Allottee are collectively referred to as the “Parties”
and individually as a “Party”.

Recitals:

13

 

	A.	 	The Company has agreed to allot and issue or procure the allotment and issuance of the Issued
Shares (as defined hereinafter) and effect the Cash Payment to the Allottee in consideration
of the provision of management services by the Allottee to Yarun, and the giving of
confidentiality undertaking and Non-Competition Undertaking by the Allottee to the Company as
set out herein;
	 
	B.	 	The obligations of the Company to allot and issue or procure the allotment and issuance of
the Issued Shares and effect the Cash Payment are subject to satisfaction or waiver of the
conditions precedent hereunder.

Therefore, in consideration of the mutual covenants and undertakings contained herein, and subject
to and on the terms and conditions herein set forth, the Parties hereto agree as follows:

ARTICLE 1 DEFINITIONS

Section 1.1 Specific Definitions

As used in this Agreement, the following terms shall have the meanings set forth or referenced
below:

“Affiliate” means with respect to any person, any other person that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under common control with, such
person. For purposes of the foregoing, with respect to any person, “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the management and
policies of such person, whether through ownership of voting securities or by contract, management
rights or otherwise.

“Business Day” means any day other than a Saturday, a Sunday or a day in which banks in either the
PRC or Hong Kong are closed for business.

“Cash Payment” means any cash payment to be made by the Company to the Allottee pursuant to
Article 2 of this Agreement, being the Tranche A Cash Payment, the Tranche B Cash Payment
and/or the Tranche C Cash Payment.

“Completion” means the Tranche A Completion, the Tranche B Completion and the Tranche C Completion,
respectively.

14

 

“Completion Date” means the Tranche A Completion Date, the Tranche B Completion Date and the
Tranche C Completion Date, respectively.

“Confidential Information” means all confidential, non-public or proprietary information belonging
to a Party regardless of how the information is stored or delivered, exchanged between the Parties
before, on or after the date of this Agreement relating to the business, technology or other
affairs of the Party who provides such information, but excludes information which:

	 	(a)	 	is in or becomes part of the public domain other than through a breach of this
Agreement or an obligation of confidence imposed on the Party to whom the information
belongs;
	 
	 	(b)	 	the recipient can prove such information was already known to it at the time of
disclosure by the Party to whom the information belongs (unless such knowledge arose
from disclosure of information in breach of an obligation of confidentiality); or
	 
	 	(c)	 	the recipient acquires from a source other than the Party to whom the information
belongs, where such source is entitled to disclose the same to the recipient.

“Encumbrance” means any mortgage, deed of trust, pledge, option, right of first refusal or any
other kind of security interest or claim against a proprietary right.

“Equity Transfer Agreement” means the equity transfer agreement in relation to the transfer of 100%
of equity interests in Yarun to be entered into by and among WFOE Redgate (  ), Yarun, the
Allottee and the other shareholders of Yarun on the date hereof.

“Hong Jiu” means Shanghai Hong Jiu Commercial Consultations Co., Ltd.
(  ), a
company incorporated under the laws of the PRC. Yarun owns 70% equity interest (“Hong Jiu Shares”)
in Hong Jiu.

“Hongjiu Sales Profits” means the proceeds received by Yarun from the sales of Hong Jiu Shares
after deduction of the original purchase price (RMB 1,000,000) thereof.

15

 

“Hong Kong” means the Hong Kong Special Administrative Region.

“IPO” means an initial public offering of the shares of Listco on an internationally recognized
stock exchange.

“Issued Shares” means the common shares of Listco to be issued or procured to be issued by Listco
to the Allottee pursuant to this Agreement, namely the Tranche A Shares, the Tranche B Shares
and/or the Tranche C Shares.

“Listco” means the Company whose common shares are listed pursuant to an IPO (or any wholly-owned
subsidiary of the Company, which is also the holding company of Yarun, whose common shares are
listed pursuant to an IPO should the IPO of the common shares of such subsidiary of the Company
occur prior to the IPO of the common shares of the Company).

“Non-Competition Undertaking” means the undertakings given by the Allottee to the Company under
this Section 2.3 of this Agreement.

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

“RMB” means Renminbi, the lawful currency of the PRC.

“Shares” means the issued share capital of Listco.

“Tranche A Cash Payment” means the cash payment to be made to the Allottee (if any) pursuant to
Sections 2.2(b)(i), 2.2(c)(i) or 2.2(d)(i) of this Agreement.

“Tranche A Completion” means the completion of the issue and allotment of the Tranche A Shares (if
any) or the payment of the Tranche A Cash Payment (as the case may be) in accordance with this
Agreement.

“Tranche A Completion Date” means fifteen (15) days after the Tranche A CP Completion Date or any
other date agreed by the Company and the Allottee in writing.

16

 

“Tranche A CP Completion Date” means the date on which all the conditions precedent to the Tranche
A Completion set out in Section 2.4 are satisfied.

“Tranche A Shares” means the Shares to be issued to the Allottee pursuant to Section 2.2(a)(i) of
this Agreement, subject to the adjustment (if applicable) set forth in Section 2.7 of this
Agreement.

“Tranche B Cash Payment” means the cash payment to be made to the Allottee (if any) pursuant to
Sections 2.2(c)(ii) or 2.2(d)(ii) of this Agreement.

“Tranche B Completion” means the completion of the issue and allotment of the Tranche B Shares (if
any) or the payment of the Tranche B Cash Payment (as the case may be) in accordance with this
Agreement.

“Tranche B Completion Date” means fifteen (15) days after the Tranche B CP Completion Date or any
other date agreed by the Company and the Allottee in writing.

“Tranche B CP Completion Date” means the date on which all the conditions precedent to the Tranche
B Completion set out in Section 2.5 are satisfied.

“Tranche B Shares” means the Shares to be issued to the Allottee pursuant to Sections 2.2(a)(ii) or
2.2(b)(ii) of this Agreement, subject to the adjustment (if applicable) set forth in Section 2.7 of
this Agreement.

“Tranche C Cash Payment” means the cash payment to be made to the Allottee (if any) pursuant to
Section 2.2(d)(iii) of this Agreement.

“Tranche C Completion” means the completion of the issue and allotment of the Tranche C Shares (if
any) or the payment of the Tranche C Cash Payment (as the case may be) in accordance with this
Agreement.

“Tranche C Completion Date” means fifteen (15) days after the Tranche C CP Completion Date or any
other date agreed by the Company and the Allottee in writing.

17

 

“Tranche C CP Completion Date” means the date on which all the conditions precedent to the Tranche
C Completion set out in Section 2.6 are satisfied.

“Tranche C Shares” means the Shares to be issued to the Allottee pursuant to Sections 2.2(a)(iii),
2.2(b)(iii) or 2.2(c)(iii) of this Agreement, subject to the adjustment (if applicable) set forth
in Section 2.7 of this Agreement.

“USD” means US dollars, the lawful currency of the United States of America.

“US GAAP” means the generally accepted accounting principles established by the Financial
Accounting Standards Board of the United States of America, as amended from time to time.

“Yarun” means Shanghai Yarun Culture Communications Co., Ltd. (  ), a company
incorporated under the laws of the PRC.

“Yarun Equity Transfer Consideration” means the consideration payable by WFOE Redgate (  ) in
connection with its acquisition of 100% of equity interests in Yarun pursuant to the Equity
Transfer Agreement.

Section 1.2 Other Terms

Other terms may be defined elsewhere in the text of this Agreement and, unless otherwise indicated,
shall have such meaning indicated throughout this Agreement.

Section 1.3 General Interpretation

Unless the contrary intention appears or otherwise defined, in this Agreement:

	(a)	 	(Articles, Sections, clauses, annexures and schedules) an Article, Section, clause, annexure
or schedule means a reference to a clause in or annexure or schedule to this Agreement;

18

 

	(b)	 	(variations or replacement) a document (including this Agreement) includes any amendment,
variation or replacement of it;
	 
	(c)	 	(reference to statutes) a statute, ordinance, code or other law includes regulations and
other instruments under it and consolidations, amendments, re-enactments or replacements of
any of them;
	 
	(d)	 	(law) means common law, principles of equity, and statutes;
	 
	(e)	 	(singular includes plural) the singular includes the plural and vice versa;
	 
	(f)	 	(person) the word “person” includes an individual, a firm, a corporation, a partnership, a
joint venture, an unincorporated body or association or any government agency;
	 
	(g)	 	(executors, administrators, successors) a particular person includes a reference to the
person’s executors, administrators, successors, substitutes (including persons taking by
novation) and assigns;
	 
	(h)	 	(two or more persons) an agreement, representation or warranty in favor of two or more
persons is for the benefit of them jointly and each of them individually;
	 
	(i)	 	(jointly and severally) an agreement, representation or warranty by two or more persons binds
them jointly and each of them individually;
	 
	(j)	 	(calculation of time) if a period of time dates from a given day or the day of an act or
event, it is to be calculated exclusive of that day;
	 
	(k)	 	(reference to a day) a day is to be interpreted as the period of time commencing at midnight
and ending 24 hours later on any Business Day;
	 
	(l)	 	(reference to a group of persons) a group of persons or things is a reference to any two or
more of them jointly and to each of them individually;

19

 

	(m)	 	(meaning not limited) the words “include”, “including”, “for example” or “such as” are not
used as, nor is it to be interpreted as, a word of limitation and when introducing an example,
do not limit the meaning of the words to which the example relates to that example or examples
of a similar kind.

Section 1.4 Headings

Headings (including those in brackets at the beginning of paragraphs) are for convenience only and
do not affect the interpretation of this Agreement.

ARTICLE 2 Issuance of the Issued Shares

Section 2.1 Issuance of the Issued Shares or Payment of the Cash Payment

As the inducement for the Allottee to enter into this Agreement and in consideration of the
entering into of the Equity Transfer Agreement and completion of the transfer of 100% equity
interests of Yarun by the Allottee to WFOE Redgate (  ) as contemplated therein, the
provision of management services by the Allottee to Yarun, and the giving of confidentiality
undertaking and Non-Competition Undertaking by the Allottee to the Company as set out herein, the
Company agrees to allot and issue or procure the allotment and issuance of the Issued Shares or
make the Cash Payment to the Allottee (as the case may be) on the terms and conditions of this
Agreement on each respective Completion Date.

Section 2.2 Determination of Consideration

	(a)	 	if an IPO occurs on or before 30th June 2009, then the Allottee shall be entitled
to receive:

	 	(i)	 	the following number of Tranche A Shares on the Tranche A Completion Date:

	 	 	 	 	 	 	 
	 

	 	X = 	 	A x C x 40% x D - F - Yarun Equity Transfer Consideration	 	 
	 

	 	 	B	 	 

	 	 	 	 	 
	 

	 	Where:	 
	 
	 	 	 	 
	 

	 	X =
	 	the number of the Tranche A Shares

20

 

	 	 	 	 	 
	 

	 	A =
	 	the audited net profits of Yarun for the year ended
31st December 2008 calculated in accordance with US GAAP less the
Hongjiu Sales Profits (“Yarun 2008 Net Profits”)
	 

	 	B =
	 	the average of the closing price per Share for the ten (10)
trading days after the announcement of Listco’s audited accounts for the
financial year ended 31st December 2008
	 

	 	C =
	 	P/E multiple used for IPO share pricing
	 

	 	D =
	 	60% (subject to the adjustments stated in Section 2.7)
	 

	 	F =
	 	Audit fee for years 2005 to 2007 US GAAP historical financial
report auditing

provided that, the Company may elect at its sole discretion to pay cash or
procure the payment of cash to the Allottee in lieu of all or part of the Tranche A
Shares issuable to the Allottee under this Section 2.2(a)(i), in which case, the amount
of cash payable in lieu of Tranche A Shares shall be equal to the number of Tranche A
Shares for which the Company has elected to pay cash (in lieu of issuance of Tranche A
Shares) under this Section 2.2(a)(i) multiplied by B;

	 	(ii)	 	the following number of Tranche B Shares on the Tranche B Completion Date:

	 	 	 	 	 	 	 
	 

	 	X  = 	 	A x C x 40% x D	 	 
	 

	 	 	B	 	 

	 	 	 	 	 
	 

	 	Where:	 	 
	 
	 	 	 	 
	 

	 	X =
	 	the number of the Tranche B Shares
	 

	 	A =
	 	the audited net profits of Yarun for the year end
31st December 2009 calculated in accordance with US GAAP (“Yarun 2009
Net Profits”)
	 

	 	B =
	 	the average of the closing price per Share for the ten (10)
trading days after the announcement of Listco’s audited accounts for the
financial year ended 31st December 2009
	 

	 	C =
	 	the average of the daily forward price earnings ratio (P/E) of
Listco for the ten (10) trading days after the announcement of Listco’s audited
accounts for the financial year ended 31st December 2009 as shown on
the Nasdaq website (or if Listco is not listed on NASDAQ, then the same shall be
calculated in accordance with such other index as is reasonably determined by
the Board of Directors of Listco)
	 

	 	D =
	 	60% (subject to the adjustments stated in Section 2.7)

provided that, the Company may elect at its sole discretion to pay cash or
procure the payment of cash to the Allottee in lieu of all or part of the

21

 

Tranche B
Shares issuable to the Allottee under this Section 2.2(a)(ii), in which case, the
amount of cash payable in lieu of Tranche B Shares shall be equal to the number of
Tranche B Shares for which the Company has elected to pay cash (in lieu of issuance of
Tranche B Shares) under this Section 2.2(a)(ii) multiplied by B;

	 	(iii)	 	the following number of Tranche C Shares on the Tranche C Completion Date:

	 	 	 	 	 	 	 
	 

	 	X  = 	 	A x C x 20% x D	 	 
	 

	 	 	B	 	 

	 	 	 	 	 
	 

	 	Where:	 	 
	 

	 	X =
	 	the number of the Tranche C Shares
	 

	 	A =
	 	the audited net profits of Yarun for the year end
31st December 2010 calculated in accordance with US GAAP (“Yarun 2010
Net Profits”)
	 

	 	B =
	 	the average of the closing price per Share for the ten (10)
trading days after the announcement of Listco’s audited accounts for the
financial year ended 31st December 2010
	 

	 	C =
	 	the average of the daily forward price earnings ratio (P/E) of
Listco for the ten (10) trading days after the announcement of Listco’s audited
accounts for the financial year ended 31st December 2010 as shown on
the Nasdaq website (or if Listco is not listed on NASDAQ, then the same shall be
calculated in accordance with such other index as is reasonably determined by
the Board of Directors of Listco)
	 

	 	D =
	 	60% (subject to the adjustments stated in Section 2.7)

provided that, the Company may elect at its sole discretion to pay cash or
procure the payment of cash to the Allottee in lieu of all or part of the Tranche C
Shares issuable to the Allottee under this Section 2.2(a)(iii), in which case, the
amount of cash payable in lieu of Tranche C Shares shall be equal to the number of
Tranche C Shares for which the Company has elected to pay cash (in lieu of issuance
of Tranche C Shares) under this Section 2.2(a)(iii) multiplied by B;

	(b)	 	if an IPO occurs after 30th June 2009 and before 31st December 2009,
then the Allottee shall be entitled to receive:

	 	(i)	 	the following amount of Tranche A Cash Payment on the Tranche A Completion Date:

22

 

	 	(1)	 	if the Yarun 2008 Net Profits are more than zero, then the Allottee shall
receive the Tranche A Cash Payment calculated as follows which shall be paid pursuant
to such arrangements to be further agreed upon by the Parties:

	 	 	 	 	 	 	 
	 

	 	Y =
	 	7 x A x 40% - F - Yarun Equity Transfer Consideration
	 	 

	 	 	 	 	 
	 

	 	Where:	 	 
	 
	 

	 	Y =
	 	the amount of Tranche A Cash Payment
	 

	 	A =
	 	the Yarun 2008 Net Profits
	 

	 	F =
	 	Audit fee for years 2005 to 2007 historical financial report auditing

	 	(2)	 	if the Yarun 2008 Net Profits are zero or less than zero, then the Allottee
shall receive 8,000 USD as the Tranche A Cash Payment;

	 	(ii)	 	the following number of Tranche B Shares on the Tranche B Completion Date:

	 	 	 	 	 	 	 
	 

	 	X =	 	A x C x 40% x D	 	 
	 

	 	 	B	 	 

	 	 	 	 	 
	 

	 	Where:	 	 
	 
	 

	 	X =
	 	the number of the Tranche B Shares
	 

	 	A =
	 	the Yarun 2009 Net Profits
	 

	 	B =
	 	the average of the closing price per Share for the ten (10)
trading days after the announcement of Listco’s audited accounts for the
financial year ended 31st December 2009
	 

	 	C =
	 	P/E multiple used for Listco IPO share pricing
	 

	 	D =
	 	60% (subject to the adjustments stated in Section 2.7)

provided that, the Company may elect at its sole discretion to pay cash or
procure the payment of cash to the Allottee in lieu of all or part of the Tranche B
Shares issuable to the Allottee under this Section 2.2(b)(ii), in which case, the
amount of cash payable in lieu of Tranche B Shares shall be equal to the number of
Tranche B Shares for which the Company has elected to pay cash (in lieu of issuance
of Tranche B Shares) under this Section 2.2(b)(ii) multiplied by B;

	 	(iii)	 	the following number of Tranche C Shares on the Tranche C Completion Date:

	 	 	 	 	 	 	 
	 

	 	X =	 	A x C x 20% x D	 	 
	 

	 	 	B	 	 

23

 

	 	 	 	 	 
	 

	 	Where:	 	 
	 
	 

	 	X =
	 	the number of the Tranche C Shares
	 

	 	A =
	 	Yarun 2010 Net Profits
	 

	 	B =
	 	the average of the closing price per share of Listco for the
ten (10) trading days after the announcement of Listco’s audited accounts for
the financial year ended 31st December 2010
	 

	 	C =
	 	the average of the daily forward price earnings ratio (P/E) of
Listco for the ten (10) trading days after the announcement of Listco’s audited
accounts for the financial year ended 31st December 2010 as
shown on the Nasdaq website (or if Listco is not listed on NASDAQ, then the
same shall be calculated in accordance with such other index as is
reasonably determined by the Board of Directors of Listco)
	 

	 	D =
	 	60% (subject to the adjustments stated in Section 2.7)

provided that, the Company may elect at its sole discretion to pay cash or
procure the payment of cash to the Allottee in lieu of all or part of the Tranche C
Shares issuable to the Allottee under this Section 2.2(b)(iii), in which case, the
amount of cash payable in lieu of Tranche C Shares shall be equal to the number of
Tranche C Shares for which the Company has elected to pay cash (in lieu of issuance
of Tranche C Shares) under this Section 2.2(b)(iii) multiplied by B;

	(c)	 	if an IPO occurs after 31st December 2009 and before 31st December 2010
then the Allottee shall be entitled to receive:

	 	(i)	 	the following amount of Tranche A Cash Payment on the Tranche A Completion Date:

	 	(1)	 	if the Yarun 2008 Net Profits are more than zero, then the Allottee shall
receive the Tranche A Cash Payment calculated as follows which shall be paid pursuant
to such arrangements to be further agreed upon by the Parties:

	 	 	 	 	 
	 
	 	Y = 	 	7 x A x 40% - F - Yarun Equity Transfer Consideration

	 	 	 	 	 
	 

	 	Where:	 	 
	 
	 

	 	Y = 	 	the amount of Tranche A Cash Payment
	 

	 	A =
	 	the Yarun 2008 Net Profits
	 

	 	F =
	 	Audit fee for years 2005 to 2007 historical financial report auditing

	 	(2)	 	if the Yarun 2008 Net Profits are zero or less than zero, then the Allottee
shall receive 8,000 USD as the Tranche A Cash Payment;

24

 

	 	(ii)	 	the following amount of Tranche B Cash Payment on the Tranche B Completion Date:

	 	(1)	 	if the Yarun 2009 Net Profits are more than zero, then the Allottee shall
receive the Tranche B Cash Payment calculated as follows which shall be paid pursuant
to such arrangements to be further agreed upon by the Parties:

	 	 	 	 	 
	 

	 	Y =
	 	7 x A x 40%

	 	 	 	 	 
	 

	 	Where:	 	 
	 
	 

	 	Y =
	 	the amount of Tranche B Cash Payment
	 

	 	A =
	 	the Yarun 2009 Net Profits

	 	(2)	 	if the Yarun 2009 Net Profits are zero or less than zero, then the Allottee
shall receive 8,000 USD as the Tranche B Cash Payment;

	 	(iii)	 	the following number of Tranche C Shares on the Tranche C Completion Date:

	 	 	 	 	 	 	 
	 

	 	X =	 	A x C x 20% x D	 	 
	 

	 	 	B	 	 

	 	 	 	 	 
	 

	 	Where:	 	 
	 
	 

	 	X =
	 	the number of the Tranche C Shares
	 

	 	A =
	 	Yarun 2010 Net Profits
	 

	 	B =
	 	the average of the closing price per Share for the ten (10)
trading days after the announcement of Listco’s audited accounts for the
financial year ended 31st December 2010
	 

	 	C =
	 	P/E multiple used for IPO share pricing
	 

	 	D =
	 	60% (subject to the adjustments stated in Section 2.7)

provided that, the Company may elect at its sole discretion to pay cash or
procure the payment of cash to the Allottee in lieu of all or part of the Tranche C
Shares issuable to the Allottee under this Section 2.2(c)(iii), in which case, the
amount of cash payable in lieu of Tranche C Shares shall be equal to the number of
Tranche C Shares for which the Company has elected to pay cash (in lieu of issuance of
Tranche C Shares) under this Section 2.2(c)(iii) multiplied by B;

25

 

	(d)	 	if the IPO does not occur on or before 31st December 2010 then the Allottee shall
be entitled to receive:

	 	(i)	 	the following amount of Tranche A Cash Payment on Tranche A Completion Date:

	 	(1)	 	if the Yarun 2008 Net Profits are more than zero, then the Allottee shall
receive the Tranche A Cash Payment as follows which shall be paid pursuant to such
arrangements to be further agreed upon by the Parties:

	 	 	 	 	 	 	 
	 

	 	Y =
	 	7 x A x 40% - F - Yarun Equity Transfer Consideration
	 	 

	 	 	 	 	 
	 

	 	Where:	 	 
	 
	 

	 	Y =
	 	the amount of Tranche A Cash Payment
	 

	 	A =
	 	the Yarun 2008 Net Profits
	 

	 	F =
	 	Audit fee for years 2005 to2007 historical financial report auditing

	 	(2)	 	if the Yarun 2008 Net Profits are zero or less than zero, then the Allottee
shall receive 8,000 USD as the Tranche A Cash Payment;

	 	(ii)	 	the following amount of Tranche B Cash Payment on Tranche B Completion Date:

	 	(1)	 	if the Yarun 2009 Net Profits are more than zero, then the Allottee shall
receive the Tranche B Cash Payment calculated as follows which shall be paid pursuant
to such arrangements to be further agreed upon by the Parties:

	 	 	 	 	 
	 
	 	Y = 	 	7 x A x 40%

	 	 	 	 	 
	 

	 	Where:	 	 
	 
	 

	 	Y =
	 	the amount of Tranche B Cash Payment
	 

	 	A =
	 	the Yarun 2009 Net Profits

	 	(2)	 	if the Yarun 2009 Net Profits are zero or less than zero, then the Allottee
shall receive 8,000 USD as the Tranche B Cash Payment;

	 	(iii)	 	the following amount of Tranche C Cash Payment on Tranche C Completion Date:

	 	(1)	 	if the Yarun 2010 Net Profits are more than zero, then the Allottee shall
receive the Tranche C Cash Payment calculated as follows which shall be paid pursuant
to such arrangements to be further agreed upon by the Parties:

	 	 	 	 	 
	 

	 	Y =
	 	7 x A x 20%

26

 

	 	 	 	 	 
	 

	 	Where:	 	 
	 
	 

	 	Y =
	 	the amount of Tranche C Cash Payment
	 

	 	A =
	 	the Yarun 2010 Net Profits

	 	(2)	 	if the Yarun 2010 Net Profits are zero or less than zero, then the Allottee
shall receive 4,000 USD as the Tranche C Cash Payment.

Section 2.3 Consideration for the Issued Shares

	(a)	 	In consideration for the Company’s issuance and allotment or procuring the issuance and
allotment of the Issued Shares or making the Cash Payment, the Allottee
undertakes that he shall not, at any time during the period starting from the date hereof
and ending on 31st December 2011, without the prior written consent of the
Board, directly or indirectly engage in, or have any equity interest in, provide any
services, consulting or otherwise, or manage or operate any person, firm, corporation,
partnership or business (whether as director, officer, employee, agent, representative,
partner, security holder, consultant or otherwise) that engages in any business which
competes with any business of the Company or its Affiliates.
	 
	(b)	 	The Allottee shall not, at any time during the period commencing from the date hereof and
ending on 31st December 2012, solicit or accept if offered to him, with or without
solicitation, on his own behalf or on behalf of any other person, the services of any person
who is an employee of the Company or its Affiliates or who was an employee of the Company or
its Affiliates at any time during the 12-month period preceding such solicitation activity or
acceptance, nor solicit any of the employees of the Company or its Affiliates to terminate
service with the Company or such Affiliates.
	 
	(c)	 	In the event the terms of this Section 2.3 shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its extending for too long a period of time or
over too great a geographical area or by reason of its being too extensive in any other
respect, it will be interpreted to extend only over the maximum period of time for which it
may be enforceable, and/or over the maximum geographical area as to which it may be
enforceable and/or to the maximum extent in all other respects as to which it may be
enforceable, all as determined by such court in such action.

Section 2.4 Conditions Precedent to the Tranche A Completion

The Company’s obligation to issue or procure the issue of the Tranche A Shares or make the Tranche
A Cash Payment (as the case may be) at the Tranche A Completion is subject to the fulfilment of the
following conditions:

27

 

	(a)	 	(Audit on Yarun for the Year 2008) the financial statements of Yarun for year 2008 have
been audited in accordance with the US GAAP by an accounting firm designated by the Company,
provided that such audit shall occur and be completed within the first six (6) calendar months
of year 2009.
	 
	(b)	 	(Shareholders’ approval) if required by any stock exchange rules or the charter documents of
Listco, the shareholders of Listco have duly approved or consented to the issue of the Tranche
A Shares or the Tranche A Cash Payment (as the case may be).
	 
	(c)	 	(Board approval) the board of directors of Listco has duly approved the issue of the Tranche
A Shares or the Tranche A Cash Payment (as the case may be).
	 
	(d)	 	(Governmental approvals) in case Listco shall issue the Tranche A Shares, and if required by
any applicable laws, the Allottee has obtained all necessary PRC governmental approvals
(including without limitation the approvals required by relevant regulations promulgated by
the State Administration for Foreign Exchange with respect to overseas investments by PRC
individuals or entities) for the acceptance of the Tranche A Shares and provided all such
approval documents to Listco.
	 
	(e)	 	(Completion of Equity Transfer) the equity transfer under the Equity Transfer Agreement has
been completed, as evidenced by the satisfaction of all the conditions precedent to the
completion set forth in the Equity Transfer Agreement, including without limitation, WFOE
Redgate (  ) being registered as the sole shareholder of Yarun and the representatives
appointed by WFOE Redgate (  ) being registered as the directors and/or legal
representative of Yarun in accordance with the Equity Transfer Agreement.
	 
	(f)	 	(Representations and Warranties) the representations and warranties of the Allottee under
Section 6.1 of this Agreement and the representations and warranties of the Allottee under
Article 3 and Schedule 3 of the Equity Transfer Agreement are true and correct as of the
Tranche A CP Completion Date in all material respects, and the Allottee has performed and
complied in all material respects with all obligations and covenants as required by this
Agreement and the Equity Transfer Agreement as of the Tranche A CP Completion Date.
	 
	(h)	 	(No breach) the Allottee has not breached any terms and conditions of this Agreement.
	 
	(i)	 	(Profits Target) the profits target of Yarun for year 2008 set forth in Appendix 1 hereto has
been satisfied.

28

 

	(j)	 	(Exclusive Advertising Sales Agency) the exclusive advertising sales agency agreements listed
in Appendix 2 hereto which have been entered into by Yarun as of the date hereof with the four
(4) television channels remain in full force and effect; provided that this condition may be
waived by the Company in writing if Yarun has entered into other exclusive advertising sales
agency agreements with other television channels such that Yarun remains the sole and
exclusive advertising agent for at least four television channels with the scale, terms and
conditions of such agreements similar to the agreements listed in Appendix 2 and are to the
reasonable satisfaction of the Company.

Section 2.5 Conditions Precedent to the Tranche B Completion

The Company’s obligation to issue or procure the issue of the Tranche B Shares or make the Tranche
B Cash Payment (as the case may be) at the Tranche B Completion is subject to the fulfilment of the
following conditions if all the following conditions having been satisfied:

(a) (Audit on Yarun for the Year 2009) the financial statements of Yarun for year 2009 have been
audited in accordance with the US GAAP by an accounting firm designated by the Company,
provided that such audit shall occur and be completed within the first six (6) calendar months
of year 2010.

(b) (Shareholders’ approval) if required by any stock exchange rules or the charter documents of
Listco, the shareholders of Listco have duly approved or consented to the issue of the Tranche
B Shares or the Tranche B Cash Payment (as the case may be).

(c) (Board approval) the board of directors of Listco has duly approved the issue of the Tranche
B Shares or the Tranche B Cash Payment (as the case may be).

(d) (Governmental approvals) in case Listco shall issue the Tranche B Shares, and if required by
any applicable laws, the Allottee has obtained all necessary PRC governmental approvals
(including without limitation the approvals required by relevant regulations promulgated by
the State Administration for Foreign Exchange with respect to overseas investments by PRC
individuals or entities) for the acceptance of the Tranche B Shares and provided all such
approval documents to Listco.

(e) (Representations and Warranties) the representations and warranties of the Allottee under
Section 6.1 of this Agreement and the representations and warranties of the Allottee under
Article 3 and Schedule 3 of the Equity Transfer Agreement are true and correct as of the
Tranche B CP Completion Date in all material respects, and the Allottee has performed and
complied in all material respects with all obligations and covenants as required by this
Agreement as of the Tranche B CP Completion Date.

(f) (Occurrence of Tranche A Completion) the Tranche A Completion has taken place in accordance
with this Agreement.

29

 

(g) (No breach) the Allottee has not breached any terms and conditions of this Agreement.

(h) (Profits Target) the profits target of Yarun for year 2009 set forth in Appendix 1 hereto has
been satisfied.

(i) (Exclusive Advertising Sales Agency) the exclusive advertising sales agency agreements listed
in Appendix 2 hereto which have been entered into by Yarun as of the date hereof with the
four(4) television channels remain in full force and effect; provided that this condition may
be waived by the Company in writing if Yarun has entered into other exclusive advertising
sales agency agreements with other television channels such that Yarun remains the sole and
exclusive advertising agent for at least four television channels with the scale, terms and
conditions of such agreements similar to the agreements listed in Appendix 2 and are otherwise
to the reasonable satisfaction of the Company.

Section 2.6 Conditions Precedent to the Tranche C Completion

The Company’s obligation to issue or procure the issue of the Tranche C Shares or to make or
procure the making of the Tranche C Cash Payment (as the case may be) at the Tranche C Completion
is subject to the fulfilment of the following conditions:

(a) (Audit on Yarun for the Year 2010) the financial statements of Yarun for year 2010 have
been audited in accordance with the US GAAP by an accounting firm designated by the Company,
provided that such audit shall occur and be completed within the first six(6) calendar months
of year 2011.

(b) (Shareholders’ approval) if required by any stock exchange rules or the charter documents of
Listco, the shareholders of Listco have duly approved or consented to the issue of the Tranche
C Shares or make the Tranche C Cash Payment.

(c) (Board approval) the board of directors of Listco has duly approved the issue of the Tranche
C Shares or make the Tranche C Cash Payment (as the case may be).

(d) (Governmental approvals) in case Listco shall issue the Tranche C Shares, and if required by
any applicable laws, the Allottee has obtained all necessary PRC governmental approvals
(including without limitation the approvals required by relevant regulations promulgated by
the State Administration for Foreign Exchange with respect to overseas investments by PRC
individuals or entities) for the acceptance of the Tranche C Shares and provided all such
approval documents to Listco.

(e) (Representations and Warranties) the representations and warranties of the Allottee under
Section 6.1 of this Agreement and the representations and warranties of the Allottee under
Article 3 and Schedule 3 of the Equity Transfer Agreement are true and correct as of the
Tranche C CP Completion Date in all material respects, and the Allottee

30

 

shall have performed
and complied in all material respects with all obligations and covenants as required by this
Agreement as of the Tranche C CP Completion Date.

(f) (Occurrence of Tranche B Completion) the Tranche A Completion and the Tranche B Completion
shall have taken place in accordance with this Agreement.

(g) (No breach) the Allottee has not breached any terms and conditions of this Agreement.

(h) (Profits Target) the profits target of Yarun for year 2010 set forth in Appendix 1 hereto has
been satisfied.

(i) (Exclusive Advertising Sales Agency) the exclusive advertising sales agency agreements listed
in Appendix 2 hereto which have been entered into by Yarun as of the date hereof with the
four(4) television channels remain in full force and effect; provided that this condition may
be waived by the Company in writing if Yarun has entered into other exclusive advertising
sales agency agreements with other television channels such
that Yarun remains the sole and exclusive
advertising agent for at least four television
channels with the scale, terms and conditions of
such agreements similar to the agreements listed in
Appendix 2 and are otherwise to the reasonable
satisfaction of the Company.

Section 2.7
Adjustment of Consideration

If Yarun’s audited net profits for the years ended 31st December 2009 or 2010 are less
than those in the previous year, then “D” referred to in Section 2.2 shall be adjusted by a ratio,
the numerator of which is the amount of audited net profits for the year in question.

The denominator of which is the amount of audited net profits for the preceding year,
provided that the amount of “C” multiplied by “D” in Sections 2.2(a)(ii), 2.2(a)(iii),
2.2(b)(ii), 2.2(b)(iii) and 2.2(c)(iii) above shall not exceed 18.

If Yarun’s audited net profits for year 2010 or 2009 divided by Yarun’s audited net profits for the
previous year exceeds 1.4, then the amount of “C” multiplied by “D” in Sections 2.2(a)(iii),
2.2(b)(iii) and 2.2(c)(iii) shall not exceed 19.

For illustration purposes only,

(a) if audited net profits of Yarun for year 2009 is RMB 3 million, and audited net profits of
Yarun for year 2008 is RMB 4 million, “D” in the relevant subsections of Section 2.2 will be
changed from 60% to 45%: (3,000,000/4,000,000) x 60% = 45%

(b) if audited net profits of Yarun for year 2010 is RMB 3 million, and audited net profits of
Yarun for year 2009 is RMB 4 million, “D” in the relevant subsections of Section 2.2 will be
changed from 60% to 45%: (3,000,000/4,000,000) x 60% = 45%

31

 

Section 2.8 Reasonable Endeavors

Each Party shall use its reasonable endeavours to procure the fulfilment of the conditions
precedent as described under this Article 2, including procuring any third party to take all
necessary actions and grant any necessary approvals. The Parties must keep each other informed of
any circumstances which may result in any condition precedent under this Article 2 not
being satisfied in accordance with the terms hereof.

Section 2.10 Issuance of Shares

For the avoidance of doubt, the Company will consider issuing the Tranche A Shares, Tranche B
Shares and the Tranche C Shares (as the case may be) to the Allottee as contemplated hereunder only
if there is a successful IPO.

ARTICLE 3 Completion

Section 3.1 Time and Place of Completion

	 	(a)	 	Tranche A Completion will take place at 11am on the Tranche A Completion Date at
No.5 room, F8, CITIC Building or any other time and place agreed by the Company and the
Allottee.
	 
	 	(b)	 	Tranche B Completion will take place at 11am on the Tranche B Completion Date at
No.5 room, F8, CITIC Building or any other time and place agreed by the Company and the
Allottee.
	 
	 	(c)	 	Tranche C Completion will take place at 11am on the Tranche C Completion Date at
No.5 room, F8, CITIC Building or any other time and place agreed by the Company and the
Allottee.

Section 3.2 Allottee’s Obligations at Completion

	 	(a)	 	Unless otherwise waived in writing by the Company, on the Tranche A Completion
Date, the Allottee shall deliver to the Company satisfactory evidence that WFOE Redgate
(  ) has been registered as the sole shareholder of Yarun and the representatives
appointed by WFOE Redgate (  ) has been registered as the directors and/or legal
representative of Yarun in accordance with the Equity Transfer Agreement, as well as
other evidence that the conditions to be performed by the Allottee on or before the
Tranche A Completion as set forth in Section 2.4 of this Agreement have been satisfied.

32

 

	 	(b)	 	Unless otherwise waived in writing by the Company, on the Tranche B Completion
Date, the Allottee shall deliver to the Company satisfactory evidence required by the
Company showing the satisfaction of the conditions to be performed by the Allottee
before Tranche B Completion as set forth in Section 2.5 of this Agreement.
	 
	 	(c)	 	Unless otherwise waived in writing by the Company, on the Tranche C Completion
Date, the Allottee shall deliver to the Company satisfactory evidence required by the
Company showing the satisfaction of the conditions to be performed by the Allottee
before Tranche C Completion as set forth in Section 2.6 of this Agreement.

Section 3.3 Company’s Obligations at Completion

Unless otherwise waived in writing by the Allottee, at each Completion, the Company shall: (a) in
the case of Cash Payment, make the applicable Cash Payment to the Allottee by wire transfer of
immediately available USD funds to the bank account designated in writing by the Allottee prior to
such Completion; or (b) in the case of the issuance of the Issued Shares, take all necessary
actions to issue the Tranche A Shares, Tranche B Shares or Tranche C
Shares (as applicable) to the Allottee, including without limitation, instruct Listco’s registered
agent to update the register of members of Listco, issue the share certificate to the Allottee
within ten (10) Business Days after respective Completion Date, and pass and deliver Listco’s board
resolutions approving the respective issuance of the Issued Shares.

ARTICLE 4 Special Covenants

Section 4.1 Extension of financial facilities by the Company

The Allottee warrants that Yarun’s cash flow is self sustainable on the current operation base and
Yarun does not require any new cash injection from Listco or the Company unless there is new
investment plan agreed by both the Allottee and the Company.

At the Company’s sole discretion, the Company may, and may cause its subsidiaries to, extend
financial facilities to Yarun as needed to assist it in its development of business.

Section 4.2 Covenants before Tranche C Completion

	(a)	 	Except as otherwise required by this Agreement or the Equity Transfer Agreement, no
resolution of the directors of Yarun shall be passed, nor any contract or commitment
entered into, in each case, from the date hereof until the Tranche C Completion Date
without the prior written consent of the Company or WFOE

33

 

	 	 	Redgate (  ), except for
(i) any board resolutions duly passed in the ordinary course of business, and (ii) any
contracts and commitments entered into in the ordinary course of business and on arm’s
length terms and conditions provided that the Company is notified of the same in advance.
As manager of Yarun, the Allottee shall devote substantially all his time to the business
of Yarun and manage the operation of Yarun in good faith.
	 
	(b)	 	The Allottee shall indemnify, defend and hold harmless the Company and its
Affiliates, officers, directors, agents and employees (each an “Indemnified Party”) from
and against all losses, damages, liabilities, claims, proceedings, costs and expenses
(including the fees, disbursements and other charges of counsel incurred by the
Indemnified Party in any action between the Allottee and the Indemnified Party or between
the Indemnified Party and any third party, in connection with any investigation or
evaluation of a claim or otherwise) resulting from or arising out of any breach by the
Allottee or Yarun of any representation or warranty, covenant or agreement in this
Agreement or in the Equity Transfer Agreement.

Section 4.3 Compliance with US GAAP and Information right of the Company

Yarun will compile its accounting book and financial report based on US GAAP. Yarun and Allottee
has obligation to report to the Company any information requested by the Company.

Yarun should engage, at its costs and expenses, one of big four international accountant firms
designated by the Company for annual audit.

Section 4.4 IPO

Each of the Parties agrees that it/he will use all reasonable endeavors to assist Listco in its
application for an IPO, including providing all information relating to itself or himself that is
necessary for the inclusion in the prospectus of Listco for the purpose of the IPO or as may be
required to be provided to the relevant stock exchange and governmental agency or authority,
signing and executing all necessary undertakings and documents and amending any terms and
conditions of this Agreement, as may be required by the applicable rules and regulations or the
relevant stock exchange and governmental agency or authority, or as may be required by the sponsors
or underwriters of the IPO.

ARTICLE 5 Company’s Warranties

Section 5.1 Accuracy of Statements

The Company represents and warrants to the Allottee that each of the following statements is true
and accurate in all material respect as of the date of this Agreement and as of the Tranche A
Completion Date, the Tranche B Completion Date and the Tranche C Completion Date as if made on each
of those dates:

34

 

(a) (Organization, Good Standing and Qualification) The Company is duly organized, validly
existing and in good standing under, and by virtue of, the laws of the place of its
incorporation or establishment and has all required power and authority to own its properties
and assets and to carry on its business as now conducted or proposed to be conducted;

(b) (Power) The Company has full power and authority to enter into this Agreement and perform its
obligations hereunder and has obtained all necessary consents and authorizations to enable it
to do so;

(c) (Binding Obligation) Assuming the due authorization, execution and delivery hereof by the
Allottee and WFOE Redgate (  ), this Agreement constitutes valid and binding obligations
upon the Company and is enforceable against it in accordance with its terms, except such
enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws of general application affecting creditors’ rights and (ii)
laws relating to the availability of specific performance, injunctive relief, or other
equitable remedies;

(d) (No Breach) The execution of this Agreement and the occurrence of the Completions do not, and
will not, conflict with or result in a breach of any obligation (including any statutory,
contractual or fiduciary obligation) by the Company or constitute or result in any default
under any provision of its constitution or any material provision of any agreement, deed,
writ, order, injunction, judgment, law, rule or regulation to which it is a party or by which
it is bound;

(e) (No Litigation; No Material Change) There is no action, suit, or other court proceeding
pending, threatened or instituted against the Company seeking to enjoin it from entering into,
or challenge the validity of this Agreement, or assert any liability against the Company.
There has been no material adverse change to the business operation of the Company;

(f) (No Creditors Arrangement) No voluntary arrangement has been proposed or reached with any
creditors of the Company;

(g) (Solvency) The Company is able to pay its debts as and when they fall due.

Section 5.2 Separate Warranties

Each warranty hereof shall be treated as a separate representation and warranty. The interpretation
of any statement made may not be restricted by reference to or inference from any other statement.

ARTICLE 6 Allottee’s Warranties

35

 

Section 6.1 Accuracy of Statements

The Allottee represents and warrants to the Company that each of the following statements is true
and accurate in all material respect as of the date of this agreement and as of the Tranche A
Completion Date, Tranche B Completion Date and Tranche C Completion Date as if made on each of
those dates:

(a) (Power) The Allottee has full power and authority to enter into this Agreement and perform
its obligations hereunder and has obtained all necessary consents and authorizations to enable
him to do so;

(b) (Binding Obligation) Assuming the due authorization, execution and delivery hereof by the
Company and WFOE Redgate (  ), this Agreement constitute valid and binding obligations
upon the Allottee and is enforceable against it in accordance with its terms;

(c) (No Breach) The execution of this Agreement and the occurrence of the Completions do not, and
will not, conflict with or result in a breach of any obligation (including any statutory,
contractual or fiduciary obligation) by the Allottee or constitute or result in any default
under any provision of its constitution or any material provision of any agreement, deed,
writ, order, injunction, judgment, law, rule or regulation to which it is a party or by which
it is bound;

(d) (No Litigation) There is no action, suit, or other court proceeding pending, threatened or
instituted against the Allottee seeking to enjoin it from entering into, or challenge the
validity of this Agreement, or assert any liability against the Allottee;

(e) (Compliance with Laws and Agreements) The execution and delivery of, and the performance
under, this Agreement by the Allottee will not conflict with any rule, regulation, judgment or
agreement applicable to the Allottee, including regulations with respect to offshore
investment by PRC individuals or entities. All actions on the Allottee’s part required for
valid execution and delivery of this Agreement have been taken prior to the date of this
Agreement. It is not necessary for the Allottee to obtain any consents or approvals from, or
file a record with, any third party or government authority in connection with the acceptance
of the Issued Shares in accordance with this Agreement. The Allottee has not breached any
terms or conditions herein or under the Equity Transfer Agreement;

(f) (No Breach) The execution of this Agreement and the occurrence of the Completions do not, and
will not, conflict with or result in a breach of any obligation (including any statutory,
contractual or fiduciary obligation) by the Allottee or constitute or result in any default
under any provision of its constitution or any material provision of any agreement, deed,
writ, order, injunction, judgment, law, rule or regulation to which he is a party or by which
he is bound.

36

 

Section 6.2 Separate Warranties

Each warranty hereof shall be treated as a separate representation and warranty. The
interpretation of any statement made may not be restricted by reference to or inference from any
other statement.

Section 6.3 Agreement

The Allottee agrees, in consideration of the issuance of the Issued Shares, to be bound by all the
terms and provisions of the memorandum and articles of association of Listco. The Allottee also
agrees that he will enter into any shareholders agreements then in force among the shareholders of
Listco (if any) upon his becoming a member of Listco.

ARTICLE 7 Confidentiality

Section 7.1 Disclosure of Confidential Information

Each Party acknowledges that all Confidential Information exchanged between the Parties
in connection with this Agreement or during the negotiations preceding this Agreement is
confidential to them and shall not be disclosed by it to any third party except:

(a) the disclosure of the Confidential Information to the employees, legal advisers, auditors and
other consultants to the Parties or its Affiliates for the purposes of performance of this
Agreement and on a need-to-know basis;

(b) the disclosure with the written consent of the Party who supplied the information
(“Disclosing Party”), which consent may be given or withheld at such Disclosing
Party’s absolute discretion;

(c) as required by law, government authorities, exchanges and/or regulatory bodies to which it is
subject; or

(d) as required to do so in connection with legal proceedings relating to this Agreement.

ARTICLE 8 Announcements

Section 8.1 Public Announcements

Subject to Section 8.2 below, no public announcement, communication or circular concerning the
transactions referred to in this Agreement may be made or sent by any Party unless it has first
obtained the written consent of the other Party, provided that such consent shall not be
unreasonably withheld or delayed.

37

 

Section 8.2 Public Announcements Required by Law

Notwithstanding the foregoing, Section 8.1 does not apply to a public announcement, communication
or circular made by any Party as required by law, government authorities, exchanges and/or
regulatory bodies to which it is subject, provided that such Party has, if practicable, first
consulted and taken into account the reasonable requirements of the other Parties before such
announcements.

ARTICLE 9 Costs and Taxes

Section 9.1 Costs and Expenses

The Parties agree to pay their own legal and other costs and expenses in connection with the
negotiation, preparation, execution and performance of this Agreement and of other related
documentation.

Section 9.2 Taxes

All sums payable and all Shares issuable by the Company to the Allottee hereunder shall be made
without withholding or deduction of any taxes, assessment or other charges (“Taxes”). The Allottee
acknowledges and agrees that he is responsible for the settlement of all Taxes in connection with
the allotment issuance of the Issued Shares. For the purpose of the foregoing, all Parties agree
that the Company may withhold from the sums payable to the Allottee the amount of Taxes payable by
the Allottee and pay such amount to the relevant governmental authority on behalf of the Allottee.
The Company may also withhold the allotment of Shares issuable to the Allottee hereunder until the
Allottee has on his account settled all the applicable Taxes in connection with the transaction
contemplated hereunder.

ARTICLE 10 Notices

Section 10.1 Form

Unless expressly stated otherwise in this Agreement, all notices, certificates, consents,
approvals, waivers and other communications in connection with this Agreement must be in writing,
signed by the sender (in case of individual) or an authorised officer of the sender (in case of
company) and marked for the attention of the person set forth in Section 10.2(b) or, if the
recipient has previously notified otherwise, then marked for in the manner last notified by such
recipient.

Section 10.2 Notices

	(a)	 	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)

38

 

	 	 	set out in this paragraph (a), the time of such delivery or service shall be determined as
follows:

	 	(i)	 	if by facsimile, at the time of dispatch to the relevant number; or
	 
	 	(ii)	 	if by hand, at the time of delivery to the relevant address; or
	 
	 	(iii)	 	if by post, the second (2nd) Business Days after being put in the post
properly addressed to the relevant addressee 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.

	(b)	 	For the purposes of this Agreement, the following addresses and facsimile numbers shall be
used for serving notices on the 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) of the same):

ALLOTTEE:

Address: Room 403, Sheng’ai Building, No.88 Caoxi North Road, Shanghai,, China

Fax: 021-64383327

WFOE Redgate (  ) :

Attention: Zhu Ying

Address: Room 804, 2nd Building, No.19 JianWai Street, Chaoyang District, Beijing,
China

Fax: 010-85263129

Company:

Attention: Zhu Ying

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

Fax: (852) 8106 8655

39

 

ARTICLE 11 General Provisions

Section 11.1 Discretion in Exercising Rights

A Party may exercise a right or remedy or give or withhold its consent in any way it considers
appropriate (including by imposing conditions), unless this Agreement expressly states otherwise.

Section 11.2 Rights Cumulative

Each and all of the various rights, powers and remedies of a Party hereto will be considered to be
cumulative with and in addition to any other rights, powers and remedies which such Party may have
at law or in equity in the event of the breach of any of the terms of this Agreement. The exercise
or partial exercise of any right, power or remedy will neither constitute the exclusive election
thereof nor the waiver of any other right, power or remedy available to such Party.

Section 11.3 Approvals and Consents

A Party may give conditional or unconditional approval or consent or withhold its approval or
consent in its absolute discretion unless this Agreement expressly provides otherwise. A party by
giving its approval or consent does not mean such Party has made or given any warranty or
representation as to any circumstance relating to the subject matter of the consent or approval.

Section 11.4 Amendment and Waiver

Any term of this Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or prospectively),
only with the written consent of the Parties hereto and their permitted assigns and transferees.
Any amendment or waiver effected in accordance with this paragraph shall be binding upon the
parties hereto and their respective successors and assigns. No failure or delay by any Party in
exercising any right, power or remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of the same preclude any further exercise thereof or the
exercise of any other right, power or remedy. Without limiting the foregoing, no waiver by any
Party of any breach by the other Parties of any provision hereof shall be deemed to be a waiver of
any subsequent breach of that or any other provision hereof. If at any time any provision of this
Agreement is or becomes illegal, invalid or unenforceable in any respect, the legality, validity
and

40

 

enforceability of the remaining provisions of this Agreement shall not be affected or impaired
thereby.

Section 11.5 Survival of Warranties

The warranties, undertakings and indemnities in this Agreement shall survive the Tranche A
Completion, Tranche B Completion and Tranche C Completion.

Section 11.6 Indemnities

The indemnities in this Agreement are continuing obligations, independent from the other
obligations of the Parties under this Agreement and continue in full force and effect after the
termination of this Agreement. It is not necessary for a Party to incur any expense or make any
payment before enforcing a right of indemnity under this Agreement.

Section 11.7 Entire Agreement

This Agreement constitutes the entire agreement and understanding among the Parties about its
subject matter and supersedes all previous agreements, understandings and negotiations (whether
written or oral) between all or any of them in respect of the same. In the event that the Parties
execute both the Chinese version and English version of this Agreement, then the English version
shall prevail.

Section 11.8 Construction

No rule of construction applies to the disadvantage of a Party because that Party was responsible
for the preparation of, or seeks to rely on, this Agreement or any part of it.

ARTICLE 12 Governing Law and Dispute Resolution

Section 12.1 Governing law

This Agreement is governed by the laws of the Hong Kong, without regard to principles of conflicts
of law thereunder.

Section 12.2 Dispute Resolution

	(a)	 	Any dispute, controversy or claim arising out of or relating to this Agreement, or the

41

 

	 	 	interpretation, breach, termination or validity hereof, shall first be subject to resolution
through consultation of the Parties to such dispute, controversy or claim. Such consultation
shall begin within seven (7) days after one Party hereto has delivered to each of the other
Parties hereto a written request for such consultation. If such consultation can not resolve
the dispute or claim within thirty (30) days following the commencement of such consultation
(“Consultation Period”), then the Parties or their representatives, as the case may be, shall,
within thirty (30) days after the expiry of the Consultation Period to meet in person and
attempt to resolve the dispute or claim in good faith. If within thirty (30) days following the
commencement of such meeting the dispute cannot be resolved, the dispute shall be submitted to
arbitration upon the request of any Party with notice to the others.
	 
	(b)	 	The arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong
International Arbitration Centre (the “Centre”). There shall be a single arbitrator who shall
be agreed upon by the parties or, failing which, who shall be selected by the then President
of the Centre.
	 
	(c)	 	The arbitration proceedings shall be conducted in English. The arbitration tribunal shall
apply the UNCITRAL Arbitration Rules then in force as administrated by the Centre in effect at
the time of the arbitration.

ARTICLE 13 Counterparts

This Agreement may be executed in any number of counterparts, each signed by the Parties to this
Agreement. Each of the signed copies so executed shall be an original, but all of which shall
together constitute one and the same instrument.

42

 

IN WITNESS WHEREOF, this Agreement has been signed on behalf of each of the Parties hereto as of
the date first written above.

Redgate Media Inc.

By                                                             

      Name: Brack, Peter Bush

      Title: Chairman & CEO

Redgate Interactive Advertising (Beijing) Co., Ltd. (  )

By                                                             

      Name: Zhu Ying

      Title: Board Chairman

Allottee

Weidong Zhu

By                                                             

Zhenhui Wang

By                                                             

Wenhua Cao

By                                                             

43

 

Appendix 1

Profits Target

 

 

Appendix 2

Exclusive Advertising Sales Agency Agreements

2

 

Appendix 2

EQUITY TRANSFER AGREEMENT

[See Exhibit 10.2.6]

3exv10w2w4

Exhibit 10.2.4

[Translation of Chinese original]

EQUITY TRANSFER AGREEMENT

IN CONNECTION WITH

SHANGHAI YARUN CULTURE COMMUNICATIONS CO., LTD.

By and Among

REDGATE INTERACTIVE ADVERTISING (BEIJING) CO., LTD.

WEIDONG ZHU

ZHENHUI WANG

And

WENHUA CAO

 

 

Table of Contents

	 	 	 	 	 
	Article 1.
	 	Definitions	 	2
	Article 2.
	 	Transfer of Equity Interest	 	3
	Article 3.
	 	Representations and Warranties	 	4
	Article 4.
	 	Closing	 	5
	Article 5.
	 	Further Covenants	 	7
	Article 6.
	 	Rights of the Parties	 	10
	Article 7.
	 	Confidentiality	 	11
	Article 8.
	 	Notices	 	12
	Article 9.
	 	Liability for Breach of Contract	 	13
	Article 10.
	 	Expenses and Taxes	 	13
	Article 11.
	 	Dispute Resolution	 	13
	Article 12.
	 	Governing Law	 	13
	Article 13.
	 	Language	 	14
	Article 14.
	 	Entire Agreement	 	14
	Article 15.
	 	Effectiveness	 	14
	Appendix 1.
	 	Conditions Precedent to Closing	 	2
	Appendix 2.
	 	Representations and Warranties	 	5
	Appendix 3.
	 	Schedule 1.  Intellectual Property	 	13
	Appendix 3.
	 	Schedule 2.  List of Senior Management Personnel	 	14
	Appendix 3.
	 	Schedule 3.  Exclusive Advertising Sales Agency Contracts	 	16
	Appendix 4.
	 	Intellectual Property Protection and Non-Compete Agreement	 	17
	Appendix 5.
	 	Non-Disclosure Agreement	 	18
	Appendix 6.
	 	Existing Television Channels	 	19

 

 

THIS EQUITY TRANSFER AGREEMENT (the “Agreement”) is entered into on this 12th day of
June 2009 by and among:

	(1)	 	REDGATE INTERACTIVE ADVERTISING (BEIJING) CO., LTD., a limited liability company duly
established and validly existing under the laws of the People’s Republic of China, with its
domicile at Suite 804, Building 2, 19 Jianguomenwai Avenue, Chaoyang District, Beijing (“Party
A”);
	 
	(2)	 	WEIDONG ZHU, a natural person and citizen of the People’s Republic of China whose ID card
number is 310110197006105018 and whose residential address is Flats 801 and 802, Building 3,
163 Puhuitang Road, Shanghai;
	 
	 	 	ZHENHUI WANG, a natural person and citizen of the People’s Republic of China whose ID card
number is 31010219690611525X and whose residential address is Flat 202, 62 Zinan Huayuan
Ercun, Zizhu Road, Minhang District, Shanghai;
	 
	 	 	WENHUA CAO, a natural person and citizen of the People’s Republic of China whose ID card
number is 330102195906230636 and whose residential address is 25-1, Phase 1, Dahua
Xiqifengqing, Wenyi West Road, Hangzhou, Zhejiang; (Weidong Zhu, Zhenhui Wang and Wenhua Cao
are hereinafter collectively referred to as “Party B”); and
	 
	(3)	 	SHANGHAI YARUN CULTURE COMMUNICATIONS CO., LTD., a limited liability company duly established
and validly existing under the laws of the People’s Republic of China, with its domicile at
D-541, 1 Huyi Road, Shanghai (the “Company”).

WHEREAS:

	(A)	 	The Company was established on December 14, 2005 and, as at the execution date hereof, has a
registered capital of Renminbi Three Million (RMB3,000,000).
	 
	(B)	 	Party B owns 100 percent of the Equity Interest in the Company, of which Weidong Zhu owns 40
percent of the Equity Interest, Zhenhui Wang owns 40 percent of the Equity Interest and Wenhua
Cao owns 20 percent of the Equity Interest.
	 
	(C)	 	Party A or an affiliate thereof (the “Proposed Listed Company”) plans to list on a foreign
stock exchange between 2009 and 2011. Party A and Party B agree that Party B shall transfer
100 percent of the Equity Interest of the Company to Party A (the “Proposed Equity Transfer”)
on the terms and conditions herein, pursuant to which Weidong Zhu shall transfer 40 percent of
the Equity Interest to Party A, Zhenhui Wang shall transfer 40 percent of the Equity Interest
to Party A and Wenhua Cao shall transfer 20 percent of the Equity Interest to Party A. The
Closing of the Proposed Equity Transfer shall be completed upon the listing.
	 
	(D)	 	On the execution date hereof, Party A and Party B have executed with the Proposed Listed
Company an agreement (the “Share Issuance Agreement”), whereby the Proposed Listed Company
shall issue shares of the Proposed Listed Company or pay a cash consideration (the “Offshore
Consideration”) to Party B once certain

 

 

	 	 	conditions have been fulfilled. The Share Issuance Agreement is attached hereto as an
Appendix.

NOW, THEREFORE, following the negotiations between the Parties, the Parties agree as follows:

ARTICLE 1. DEFINITIONS

	1.1	 	Unless otherwise expressly indicated or required by the context, the following terms shall
have the meanings assigned to them as follows:
	 
	 	 	“Equity Interest” means, unless otherwise agreed by the Parties, 100 percent of the capital
contribution to the Company owned by Party B and all title, rights and interests therein
(including the rights and interests in any retained earnings of the Company), namely the
equity interest that is the subject of the Proposed Equity Transfer.
	 
	 	 	“Closing” means the completion by the Parties of the transfer of the Equity Interest
mentioned in Article 2 hereof pursuant to Article 4.5 of this Agreement.
	 
	 	 	“Closing Date” means the date on which all of the Conditions Precedent for the Closing set
forth in Appendix 1 hereto have been fulfilled (or waived) and the Parties confirm, in
accordance with Article 4 hereof, that all of the Conditions Precedent have been fulfilled
(or waived), or such other date as agreed upon by Both Parties.
	 
	 	 	“Commencement Date” means a certain date designated by Party A which shall be a date prior
to the Closing Date but after Party A is listed.
	 
	 	 	“Encumbrances” means any mortgages, claims, liens, options, pledges, encumbrances,
preemptive rights, acquisition rights, seizure rights, ownership retention, setoff rights,
counterclaims, trust arrangements and other such restrictions (including restrictions on the
right to use, vote, transfer, receive proceeds or other ownership rights);
	 
	 	 	“Due Diligence” means the comprehensive due diligence on the Company conducted by Party A
and a party or parties designated by Party A prior to the Closing.
	 
	 	 	“Disclosure Letter” means the disclosure letter signed and submitted by the Company to Party
A on or before the Commencement Date which discloses any other matters other than the
representations and warranties set forth in Appendix 2, but all disclosed matters must be
specific and complete and correspond to the relevant sequential reference numbers in
Appendix 2.
	 
	 	 	“Confidential Information” means all oral or written information on or relating to any of
the Parties’ business operations, business strategies, business plans, investment plans,
sales, clients, marketing, technologies, research and development, finances or otherwise,
including but not limited to all reports and records containing such information and all
copies (including electronic copies), reproductions, reprints and translations thereof. For
purposes of this Agreement, the term “Confidential Information” shall also include this
Agreement and any of the documents (including

2

 

	 	 	but not limited to the necessary documents that Both Parties are required to execute for the
Closing) specified or referenced herein.
	 
	 	 	“Conditions Precedent” means the conditions precedent for the Closing set forth in Appendix
1 hereto.
	 
	 	 	“Working Day” or “Business Day” means a day other than a Saturday, Sunday or statutory
public holiday in mainland China.
	 
	 	 	“Renminbi” or “RMB” means the legal currency of the PRC.
	 
	 	 	“AoA” means the articles of association of the Company (including versions thereof as
amended and supplemented from time to time).
	 
	 	 	“Registration Authority” means the competent administration for industry and commerce with
which the Company is registered.
	 
	 	 	“Force Majeure Event” means any event that arises after the execution hereof, that is
unforeseeable at the time of the execution hereof, the occurrence or consequences of which
are unavoidable or insurmountable and that impedes full or partial performance by any Party
or that impedes the performance hereof, and such event includes but is not limited to fire,
flood, earthquake, typhoon, Tsunami, war, terrorist activities or other violent acts,
accident, strike, epidemics and quarantine restriction.
	 
	1.2	 	Unless otherwise expressly indicated or required by the context:

	 	1.2.1	 	any reference to a contract, agreement or document herein shall mean such
contract, agreement or document as may be amended, supplemented or novated from time to
time;
	 
	 	1.2.2	 	any reference to a person in this Agreement or another related contract,
agreement or document shall include such person’s successors and permitted assigns;
	 
	 	1.2.3	 	any reference to an Article or Appendix herein shall be deemed to apply to the
specified Article of or Appendix to this Agreement; and
	 
	 	1.2.4	 	“Party” shall refer to any of the Parties hereto, “Parties” or “Each Party”
shall refer to each Party or all of the Parties hereto and “Both Parties” shall refer
to Party A and Party B.

ARTICLE 2. TRANSFER OF EQUITY INTEREST

	2.1	 	Party B agrees to transfer the Equity Interest to Party A for the price of Renminbi Three
Million (RMB3,000,000) (the “Transfer Price”) and Party A agrees, subject to fulfillment of
the Conditions Precedent, to purchase the Equity Interest from Party B for the price of
Renminbi Three Million (RMB3,000,000) in accordance with Article 4 hereof. The Equity
Interest shall be free of any Encumbrances.

3

 

	2.2	 	The holding of the equity interest of the Company prior to the completion of the Proposed
Equity Transfer is set forth as below:

	 	 	 	 	 	 	 	 	 
	Name of shareholder	 	Capital contribution	 	Percentage
	Weidong Zhu
	 	RMB 1,200,000	 	 	40	%
	Zhenhui Wang
	 	RMB 1,200,000	 	 	40	%
	Wenhua Cao
	 	RMB    600,000	 	 	20	%
	Total
	 	RMB 3,000,000	 	 	100	%

	2.3	 	The holding of the equity interest of the Company after the completion of the Proposed Equity
Transfer shall be as follows:

	 	 	 	 	 	 	 	 	 
	Name of shareholder	 	Capital contribution	 	Percentage
	Redgate Interactive
Advertising (Beijing) Co.,
Ltd.
	 	RMB 3,000,000	 	 	100	%
	Total
	 	RMB 3,000,000	 	 	100	%

ARTICLE 3. REPRESENTATIONS AND WARRANTIES

	3.1	 	Each Party represents and warrants to the other Parties as follows:
Each Party has the right, authorization and power to execute and
perform this Agreement and the related Appendices (including both
Chinese and English language versions) and if executed by the Parties,
this Agreement shall constitute a lawful, valid and binding obligation
of the Parties that may be enforced pursuant to the terms hereof. The
representations and warranties in this Article 3.1 are true, accurate,
complete and not misleading as of the execution date hereof and the
Closing Date.
	 
	3.2	 	Party B and the Company, separately and jointly, further make the representations and
warranties set forth in Appendix 2 hereto to Party A.
	 
	3.3	 	Unless expressly indicated otherwise, each Party warrants that each representation and
warranty by that Party, as of the Commencement Date and the Closing Date, is true, accurate,
complete and not misleading.
	 
	3.4	 	If any representation or warranty given in this Agreement by a Party is false or erroneous,
or if any representation or warranty is not duly and timely performed, the Party that made
such representation or warranty shall be deemed in breach of such representation or warranty.
In addition to performing the other obligations herein, the Party in breach of the
representation or warranty shall indemnify and bear the losses, damages, expenses (including
but not limited to reasonable legal fees or litigation expenses) and liabilities incurred by
the non-breaching Parties as a result of such breach.

4

 

	3.5	 	Prior to the completion of the Closing, if a Party becomes aware that any representation or
warranty made hereunder by such Party is untrue, inaccurate, incomplete or misleading to the
other Parties:

	 	3.5.1	 	the breaching Party shall promptly notify the other Parties thereof in
writing;
	 
	 	3.5.2	 	the breaching Party shall promptly take all necessary measures to cure such
breach. If such Party fails to cure the breach within thirty (30) days from the date
of giving the written notice specified in Article 3.5.1, the Parties shall negotiate in
good faith so as to reach a resolution acceptable to all the Parties; and
	 
	 	3.5.3	 	if the breach of the representation or warranty remains uncured within thirty
(30) days from the commencement of the good faith negotiations mentioned in Article
3.5.2 and Both Parties are unable to reach a resolution, the non-breaching Party may
select to proceed with the Closing or unilaterally terminate this Agreement without
taking any liability. Unless agreed in writing by all of the non-breaching Parties,
under no circumstances shall the breaching Party be deemed to have been released from
its liability for breach of contract under Article 3.4. The termination hereof shall
not affect the rights and obligations that have arisen prior to the termination.

ARTICLE 4. CLOSING

	4.1	 	Party A shall have the right, through its representatives or advisors, to conduct a Due
Diligence on the Company prior to the Closing. Party B and the Company shall use their best
efforts to cooperate in such Due Diligence. Party A shall have the right, based on the
results of the Due Diligence and the contents of the Disclosure Letter, to (i) proceed with
the Closing pursuant hereto, if it is satisfied with the results of the Due Diligence; (ii)
consult with Party B on amending or supplementing this Agreement, including but not limited to
adding certain Conditions Precedent to the Closing if, based on the results of the Due
Diligence, there are obligations other than those specified herein that Party B and the
Company are required to perform prior to the Closing. Party B and the Company shall cooperate
in good faith with the amendments of this Agreement as reasonably proposed by Party A; (iii)
terminate this Agreement without taking any liability, if it is not satisfied with the results
of the Due Diligence or the contents of the Disclosure Letter.
	 
	4.2	 	The Closing is conditioned on the fulfillment of the Conditions Precedent set forth in
Appendix 1 hereto.
	 
	4.3	 	Both Parties shall use all reasonable efforts to procure the fulfillment of all of the
Conditions Precedent for the Closing. Subject to the confirmation by the Parties in writing
of the fulfillment (or waiver by Party A) of all the Conditions Precedent to the equity
transfer, the Closing of the Proposed Equity Transfer shall be conducted within thirty (30)
Working Days after the offshore listing of the Proposed Listed Company (the “Closing Period”).
If any of the Conditions Precedent set forth in Article 1.2 of Appendix 2 hereto is not
fulfilled during the Closing Period, Party A shall have the right, at its own discretion, by
giving Party B written notice, to:

5

 

	 	4.3.1	 	extend the Closing Period (i.e., to designate a later date as the deadline of
the Closing Period). If such Condition Precedent remains unfulfilled after the
expiration of the extended Closing Period, Party A shall have right to continuously
apply to Article 4.3.3 hereof;
	 
	 	4.3.2	 	waive the unfulfilled Condition Precedent, thereby proceeding to the Closing
on schedule;
	 
	 	4.3.3	 	terminate this Agreement without taking any liability. Unless otherwise
provided herein, such termination shall not affect the rights and obligations of the
Parties that may have arisen prior to the termination hereof. After the termination
hereof, each Party shall take all necessary actions to restore this Agreement to a
state identical to that prior to the execution, including but not limited to making
applications to the competent government authorities to cancel, withdraw or amend any
applications, registrations, filings or any other relevant procedures that have been
made or are in the process of being made in connection with the transactions specified
herein.

	4.4	 	Both Parties shall respectively have the right to notify the other Party in writing that such
Party waives part or all of the Conditions Precedent that the other Party is required to
fulfill. The Parties agree that within three (3) Business Days after all of the Conditions
Precedent have been fulfilled (or waived), Party B shall provide the relevant supporting
documentation to Party A and send a written notice to Party A. The Parties shall jointly
confirm in writing whether the Conditions Precedent have been fulfilled within three (3)
Business Days from the date on which the notice is given or on such other date as may be
agreed by the Parties.
	 
	4.5	 	The Closing of the Proposed Equity Transfer shall take place in Shanghai on the Closing Date.
At the time of the Closing, Party B shall submit to Party A written documentation evidencing
that the Conditions Precedent have been fulfilled (including but not limited to all
documentation amended by the Registration Authority which identifies Party A as the
shareholder of the Company, such as the Company’s register of shareholders, the AoA and the
new business license which reflect the business registration change and the business
registration documents that evidence the change in registration of the Company’s directors to
those persons appointed by Party A). The Parties shall confirm in writing whether all of the
Conditions Precedent specified in Article 4.2 hereof have been fulfilled. Party A shall,
within seven (7) Working Days after the Closing Date, pay the Transfer Price specified in
Article 2.1 hereof to the account designated by Party B.
	 
	4.6	 	If the Closing cannot be carried out due to a Force Majeure Event (despite of the fulfillment
of all of the other Conditions Precedent), the Parties shall promptly hold negotiations to
seek a mutually acceptable solution. If the Parties fail to reach a solution within fifteen
(15) Working Days from the fulfillment of all of the Conditions Precedent:

	 	4.6.1	 	this Agreement shall terminate automatically on the expiry of such fifteen
(15)-Working-Day period, unless the Parties agree otherwise in writing. Unless
otherwise provided herein, such termination shall not affect the Parties’ rights and
obligations that may have arisen by the time of the termination hereof; and

6

 

	 	4.6.2	 	after the termination hereof, each Party shall take all necessary actions to
restore this Agreement to a state identical to that prior to the execution, including
but not limited to making applications to the competent government authorities to
withdraw, cancel or amend any applications, registrations, filings or any other
relevant procedures that have been made or are in the process of being made in
connection with the transactions specified herein.

	4.7	 	Both Parties agree that the non-breaching Party may require the breaching Party to indemnify
all claims, expenses, costs, losses and liabilities (including tax liabilities) incurred or
arising in connection with the breach, whether directly or indirectly, if:

	 	4.7.1	 	Party B fails to perform or to punctually complete the performance of its
obligations under Article 4.2 hereof, thereby making the Closing of the Proposed Equity
Transfer impossible; or
	 
	 	4.7.2	 	Party A fails to pay to Party B the Transfer Price in full pursuant to Article
4.5 hereof.

ARTICLE 5. FURTHER COVENANTS

	5.1	 	The Parties agree that they shall execute all of the documents and carry out in accordance
with the law all the acts that may be reasonably required for the full implementation of this
Agreement.
	 
	5.2	 	With a view to realizing the objectives hereof, Party B and/or the Company shall not, from
the effective date hereof, sell, transfer, donate or otherwise dispose of any material assets
or business of the Company. The Company further covenants that it will operate its assets in
a normal manner and use its best efforts to ensure the Company’s continuous development.
Party B shall not transfer any of its Equity Interest in the Company to any person other than
Party A and shall not reduce the Company’s capital or otherwise revise its equity structure.
	 
	5.3	 	From the effective date hereof, the Company shall, within the first [five (5) days] of each
month, furnish to Party A the Company’s financial statements for the preceding fiscal month.
Subject to a prior written notice, Party A shall have the right, during normal working hours,
to request that the Company provide its financial statements, cash flow statements and all
other such documents relating to its business for Party A’s review and Party A shall have the
right to make copies or summaries thereof.
	 
	5.4	 	From the effective date hereof, none of the parties comprising of Party B shall directly or
indirectly hold any interests in any entity or sector that engages in business that competes
with or is similar to that of the Company or in any sector that could be in competition with
the business of the Company, and shall not provide any services to any entity that engages in
business that competes with or is similar to that of the Company.
	 
	5.5	 	Party B, as the shareholders of the Company prior to the Closing, shall not do, and shall not
permit the Company to do, anything during the period between the effective date and the
Closing Date that could have a material adverse effect on the Equity Interest and/or the
Company. For this purpose, Party B and/or the Company

7

 

	 	 	undertake(s) that during the period between the Commencement Date and the Closing Date,
unless otherwise agreed in advance in writing by Party A:

	 	5.5.1	 	the Company shall not be permitted to pay (nor shall it agree to pay) any
amounts other than the amounts it is required to pay in the ordinary course of
business; notwithstanding the foregoing, the Company shall not incur (or agree to
incur) any single cash payments exceeding Renminbi Fifty Thousand (RMB50,000) or cash
payments that in the aggregate exceed Renminbi One Hundred and Fifty Thousand
(RMB150,000) regardless of whether in the ordinary course of business;

	 	(i)	 	the Company shall not be permitted to sell, mortgage, pledge,
lease, assign, donate or otherwise dispose of assets that are not set forth in
its scope of business where the total transaction value exceeds Renminbi Ten
Thousand (RMB10,000);
	 
	 	(ii)	 	other than in the ordinary course of business, the Company
shall not be permitted to dispose of any fixed assets or approve of the
disposal or acquisition of the Company’s fixed assets, relinquish any rights in
any of the Company’s assets or enter into any contract that could result in the
running-off of any fixed assets or cause the Company to incur any other
liabilities; and
	 
	 	(iii)	 	the Company shall not make any expenditures that are not set
forth in its scope of business where the total amount exceeds Renminbi Ten
Thousand (RMB10,000) or purchase any tangible or intangible assets (including
equity investment in any other companies) that are not set forth in its scope
of business where the value exceeds Renminbi Ten Thousand (RMB10,000);

	 	5.5.2	 	Party B and/or the Company shall not be permitted to enter into any
transaction or take any action other than in the ordinary course of business;
	 
	 	5.5.3	 	Party B and/or the Company shall not be permitted to commit any act or
omission that constitutes or could constitute a breach of the representations and
warranties given by Party B and/or the Company hereunder;
	 
	 	5.5.4	 	the Company shall not be permitted to declare a distribution or make a payment
or make preparations for the declaration, payment or distribution of any dividends or
bonuses or make any other profit distribution;
	 
	 	5.5.5	 	the Company shall not be permitted to make or agree to make a capital
increase, capital reduction or any other such change in its capital;
	 
	 	5.5.6	 	other than the loans disclosed to Party A by the Company prior to the
execution date hereof, the Company shall not be permitted to make or extend loans or
provide any other such form of financial assistance to any third party;
	 
	 	5.5.7	 	unless otherwise provided in the laws, statutes, rules or regulations, the
Company shall not be permitted to pay a bonus to any manager, director, employee, sales
representative, agent or advisor, increase the said persons’

8

 

	 	 	 	income in any manner or change the remuneration or benefits of such persons in any
manner whatsoever;
	 
	 	5.5.8	 	the Company shall not be permitted to provide security or guarantees to Party
B or any third party or create any mortgage, pledge or other form of Encumbrances on
its assets or Equity Interest;
	 
	 	5.5.9	 	the Company shall not be permitted to prepay debts, release any third party
from the Company’s claims on such party or waive any right of recourse;
	 
	 	5.5.10	 	any contracts or agreements into which the Company has entered shall not be permitted
to be amended;
	 
	 	5.5.11	 	the Company’s accounting methods, policies or principles, or financial and accounting
rules and regulations shall not be permitted to be revised;
	 
	 	5.5.12	 	any of the Company’s sales practices or accounting methods shall not be permitted to
be materially revised or altered, or the Company’s employment policies, rules or
regulations shall not be permitted to be materially changed;
	 
	 	5.5.13	 	other than resolutions adopted for the purpose of performing this Agreement, any
shareholders’ resolution or board resolution that runs counter to the conventional
matters discussed and adopted at annual shareholders’ meetings of the Company shall not
be permitted to be adopted;
	 
	 	5.5.14	 	Party B and/or the Company shall not be permitted to take any actions that are
inconsistent with the provisions hereof or the transactions contemplated hereunder;
	 
	 	5.5.15	 	the Company shall not be permitted to restructure its capital structure, amend its
AoA or otherwise amend its registered business particulars (e.g. its name, address or
such other basic particulars);
	 
	 	5.5.16	 	the Company shall not be permitted to enter into agreements involving intellectual
property with a third party, regardless of whether the title to intellectual property
owned by the Company changes, including but not limited to change by transfer, gifting,
etc., or intellectual property owned by the Company is licensed to a third party or the
Company has use of a third party’s intellectual property pursuant to such agreement;
and
	 
	 	5.5.17	 	any act or omission that could lead to any of the aforementioned circumstances shall
not be permitted to be committed.

	5.6	 	If the facts on which Party B and/or the Company relied in making its and/or their
representations and warranties herein change, potentially causing a material adverse effect on
the transactions hereunder, Party B and/or the Company shall promptly disclose such facts to
Party A.
	 
	5.7	 	The Parties hereby agree and confirm that the equity acquisition and payment of the Transfer
Price by Party A pursuant hereto are reliant on the Company’s net equity value as confirmed in
the financial information disclosed or provided by Party B during the audit of the Company.
Accordingly, if, after the completion of the

9

 

	 	 	Proposed Equity Transfer, Party A discovers that the Company has any unpaid debts that are
not disclosed during the pre-Closing audit or if the value of the Company’s assets or Equity
Interest is impaired due to any inaccurate financial information disclosed by Party B or due
to Party B’s failure to comply with its covenants set forth in Article 5.5 above (a “Default
Amount”), each of the parties comprising of Party B undertakes that it shall bear the joint
and several liability in respect of such Default Amount in proportion to its capital
contribution to the Company prior to the Proposed Equity Transfer. Party A shall have the
option, at its own discretion, to either deduct the Default Amount from the Transfer Price
(if it has not been paid) or Offshore Consideration or demand that Party B otherwise pay the
Default Amount to the Company.

	5.8	 	Party B, as management personnel of the Company, agrees to take all necessary actions prior
to the Closing:

	 	5.8.1	 	to secure, upon the expiration of each relevant contract, the renewal by the
Company of the exclusive advertising agency contracts for the television channels set
forth in Appendix 6 hereto (“Existing Television Channels”). Pursuant to such renewed
contracts, the Company shall at least have no less than one (1) year of exclusive
advertising agency rights for the Existing Television Channels; or
	 
	 	5.8.2	 	to procure the execution by the Company of exclusive advertising sales agency
agreements with other television channels so as to ensure that under any circumstance
the Company is the advertising agency for at least four television channels (such
television channels shall be subject to the consent and approval of Party A), and the
provisions, terms and conditions of such advertising sales agency agreements shall be
substantially identical to those of the advertising sales agency agreements set forth
in Schedule 3 of Appendix 3 hereto and shall be subject to the consent and approval of
Party A.

ARTICLE 6. RIGHTS OF THE PARTIES

	6.1	 	The Parties agree that if any of the following facts, matters or events exists prior to the
Closing, Party A may terminate this Agreement without taking any liability by so notifying
Party B and/or the Company in writing. Additionally, it may demand that the breaching Party
bear the liability for breach of contract specified in Article 9:

	 	6.1.1	 	any act of Party B and/or the Company that constitutes a fundamental breach
hereof, making it impossible for Party A to complete the acquisition of the Equity
Interest;
	 
	 	6.1.2	 	any breach by Party B and/or the Company of any representation or warranty and
such breach has a material adverse effect on the Company and the transactions
hereunder; or
	 
	 	6.1.3	 	an event that has or may have a material adverse effect on the Company’s
business, financial condition or prospects.

	6.2	 	The Parties agree that if any of the following facts, matters or events exists prior to the
Closing, Party B may terminate this Agreement without taking any liability by so

10

 

	 	 	notifying Party A in writing. Additionally, Party B may demand that the breaching Party
bear the liability for breach of contract under Article 9:

	 	6.2.1	 	an act of Party A that constitutes a fundamental breach hereof and the
proposed offshore listing, making it impossible for Party B to receive the Transfer
Price and the Offshore Consideration; or
	 
	 	6.2.2	 	an event that has or may have a material adverse effect on the transactions
hereunder that arises due to the willful misconduct or gross negligence on the part of
Party A.

ARTICLE 7. CONFIDENTIALITY

	7.1	 	A Party (the “Receiving Party”) that becomes aware of or receives Confidential Information
from a Party hereto (the “Disclosing Party”) shall keep such information confidential, may not
use such Confidential Information for any purpose other than for the purposes contemplated by
this Agreement and may not disclose the Confidential Information to any party other than a
Party hereto (or a company appointed by any Party (such company shall bear the confidentiality
obligations hereunder, and each Party shall bear the legal liability arising from a breach of
the confidentiality obligations hereunder committed by any company appointed by said Party))
without the prior written consent of the other Parties. Notwithstanding the foregoing
restrictions, the confidentiality obligations set forth in this Article 7 shall not apply to:

	 	7.1.1	 	information that has entered the public domain other than as a result of the
wrongful conduct of the Receiving Party or its representatives, agents, suppliers or
subcontractors;
	 
	 	7.1.2	 	information legitimately and legally obtained by the Receiving Party from a
third party, provided that at the time of obtaining such information, it is not subject
to confidentiality obligations or other restrictions on use; or
	 
	 	7.1.3	 	information in written form owned by the Receiving Party, which is not subject
to any restrictions on use or disclosure and is not obtained for the purpose of
executing or performing this Agreement.

	7.2	 	Notwithstanding Article 7.1, the Receiving Party may disclose Confidential Information to its
employees, directors and professional advisors that is reasonably necessary for the purposes
of this Agreement, provided that the Receiving Party ensures that such employees, directors
and professional advisors are aware of and comply with the confidentiality obligations set
forth in this Article. If the disclosure of the relevant Confidential Information is required
by law or requested by a competent court, regulatory authority or any other such competent
government agency, the Receiving Party may disclose such Confidential Information, provided
that the Receiving Party shall, to the extent permitted by relevant laws and statutes, take
all necessary actions to ensure that the Confidential Information is treated as confidential.
	 
	7.3	 	The Receiving Party shall not reproduce any Confidential Information in any manner whatsoever
without the prior written consent of the Disclosing Party.

11

 

	7.4	 	This Article 7 shall survive the termination of this Agreement.

ARTICLE 8. NOTICES

	8.1	 	Any notice hereunder shall be made in writing and dispatched by fax or registered mail to the
recipient’s designated number or address. Notices dispatched by the aforementioned means
shall be deemed received:

	 	8.1.1	 	the twelfth (12th) hour after transmission, if dispatched by fax; and
	 
	 	8.1.2	 	the third (3rd) day after consignment to the post office, if dispatched by
registered mail.

	8.2	 	If Party A dispatches a written notice to Party B pursuant to Article 8.1 hereof, it shall
dispatch the same to Party B at the following fax numbers or correspondence addresses:
	 
	 	 	Weidong Zhu
	 
	 	 	Fax number: 021-64383327
	 
	 	 	Correspondence address: Suite 403, ShengAi Tower, 88 Caoxi North Road, Shanghai
	 
	 	 	Attn.: Weidong Zhu
	 
	 	 	Zhenhui Wang
	 
	 	 	Fax number: 021-64383327
	 
	 	 	Correspondence address: Suite 403, ShengAi Tower, 88 Caoxi North Road, Shanghai
	 
	 	 	Attn.: Weidong Zhu
	 
	 	 	Wenhua Cao
	 
	 	 	Fax number: 021-64383327
	 
	 	 	Correspondence address: Suite 403, ShengAi Tower, 88 Caoxi North Road, Shanghai
	 
	 	 	Attn.: Weidong Zhu
	 
	8.3	 	If Party B dispatches a written notice to Party A pursuant to Article 8.1 hereof, it shall
dispatch the same to Party A at the following fax number or correspondence address:
	 
	 	 	Fax number: 010-85263129
	 
	 	 	Correspondence address: Suite 804, Building 2, 19 Jianguomenwai Avenue, Chaoyang District,
Beijing

12

 

	 	 	Attn.: Ying Zhu

ARTICLE 9. LIABILITY FOR BREACH OF CONTRACT

	9.1	 	If a Party breaches any of the provisions hereof, it shall compensate the non-breaching
Parties for all claims, expenses, costs, losses and liabilities incurred or arising in
connection with such breach, whether directly or indirectly. If the breaching Party is one of
the parties comprising of Party B and/or the Company, Party B shall jointly and severally bear
the liabilities in respect of the compensation for such breach.
	 
	9.2	 	Without prejudice to any of the other provisions of this Article 9, if a Party fails to
perform any of its obligations hereunder, the non-breaching Parties shall, in addition to
exercising any other rights and remedies available hereunder, be entitled to demand that the
breaching Party perform the relevant obligation and the Parties expressly waive the defense of
sufficiency of damages.
	 
	9.3	 	Without prejudice to any of the other provisions of this Article 9, if a party comprising of
Party B fails to fully transfer the Equity Interest to Party A on the terms and conditions
hereof, Party A shall have the right to demand in writing that Party B perform its obligations
as specified herein and transfer the Equity Interest to Party A. If Party B does not complete
the procedures for amending the business registration for the Proposed Equity Transfer within
seven (7) Working Days after receipt of the written notice from Party A, Party A shall be
entitled to unilaterally terminate this Agreement on the basis of such material breach and
demand that the breaching Party compensate for the losses, damages and costs (including but
not limited to reasonable legal fees and litigation expenses) incurred in connection with
Proposed Equity Transfer by Party A as a result thereof.

ARTICLE 10. EXPENSES AND TAXES

	10.1	 	Both Parties shall each bear its own expenses (including but not limited to legal,
accounting, financial, consulting, advisory, auditing, due diligence and other related
expenses) in connection with all the negotiations and the implementation of the final
agreement (e.g., this Agreement (including the Appendices)) and the acquisition.
	 
	10.2	 	Both Parties shall each pay any taxes it may be required to pay in connection with Proposed
Equity Transfer hereunder. Both Parties shall each be responsible for paying the stamp duty
in respect of the original of this Agreement it holds.

ARTICLE 11. DISPUTE RESOLUTION

Any dispute arising from or in connection with this Agreement, including disputes over the validity
or existence of this Agreement, shall be resolved by Both Parties through good faith negotiations.
If the dispute is not resolved within thirty (30) days after a Party gives notice requesting such
negotiations, any Party shall have the right to submit the dispute to the Shanghai Arbitration
Commission for arbitration in Beijing in accordance with its arbitration rules then in effect. The
arbitration award shall be final and binding on Both Parties.

13

 

ARTICLE 12. GOVERNING LAW

This Agreement shall be governed by, and construed in accordance with, the laws of the People’s
Republic of China.

ARTICLE 13. LANGUAGE

This Agreement is made in Chinese in six (6) counterparts, of which Party A shall hold one
original, each party comprising of Party B shall hold one original and the remaining originals
shall be used to carry out the relevant registration procedures.

ARTICLE 14. ENTIRE AGREEMENT

This Agreement, including the attached Annexes, Appendices and Schedules, supersedes all prior
written or oral agreements on the matters provided for herein reached by the Parties and
constitutes the entire agreement between Both Parties.

ARTICLE 15. EFFECTIVENESS

This Agreement shall enter into effect after it is signed/sealed by the Parties or their authorized
representatives and once Party A has obtained its offshore listing and the conditions regarding the
payment of the Offshore Consideration set forth in paragraph D of Article 1 hereof are satisfied.

IN WITNESS WHEREOF, this Agreement is duly executed by the Parties on the date first set forth
above.

14

 

Execution Page

	 	 	 	 	 
	Party A:

REDGATE INTERACTIVE ADVERTISING (BEIJING) CO., LTD. [company seal]

 	 	 
	By:  	/s/ Ying Zhu
 	 
	 	Name of Legal Representative: Ying Zhu 	 	 

	 	 	 	 	 
	Party B:

WEIDONG ZHU

 	 	 
	Signature: 	 /s/ Weidong Zhu
 	 	 
	 	 	 
	 
	ZHENHUI WANG

 	 	 
	Signature: 	/s/ Zhenhui Wang
 	 
	 	 	 
	 	 	 
	WENHUA CAO

 	 
	Signature: 	 /s/ Wenhua Cao
 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	SHANGHAI YARUN CULTURE COMMUNICATIONS CO., LTD.[company seal]

 	 
	By:  	/s/ Weidong Zhu
 	 
	 	Name of Legal Representative: Weidong Zhu 	 
	 	 	 	 
	 

 

 

APPENDIX 1.

CONDITIONS PRECEDENT TO CLOSING

The Closing of the Proposed Equity Transfer is conditioned on the fulfillment of all of the
following conditions (or the waiver thereof in writing by the interested Party):

	 	1.1	 	Party A shall be responsible for:
	 
	 	 	 	executing all legal documents that Party A is required to execute in order to
complete the Proposed Equity Transfer (including but not limited to the equity
transfer documents that the competent administration for industry and commerce may
require to be executed).
	 
	 	1.2	 	Party B and the Company shall ensure that:

	 	(1)	 	the Company has secured all permits, approvals, licenses,
authorizations, etc. that are required by the law to conduct its business;
	 
	 	(2)	 	Party B and the Company have complied with all of their
respective obligations and covenants hereunder, including but not limited to
the covenants set forth in Articles 5.2 to 5.5 of this Agreement, and the
Company shall have submitted to Party A a letter executed by its authorized
representative confirming that as at the Closing Date, no event has occurred
that has or could have a material adverse effect on the Company’s business or
financial position;
	 
	 	(3)	 	the representations and warranties given by Party B and the
Company are true, accurate, complete and not misleading as at the Commencement
Date and Closing Date;
	 
	 	(4)	 	Weidong Zhu, Zhenhui Wang and all of the management personnel
or core technical personnel specified in Schedule 2 of Appendix 3 have executed
with the Company the Intellectual Property Protection and Non-Compete Agreement
as set forth in Appendix 4 and the Non-Disclosure Agreement as set forth in
Appendix 5;
	 
	 	(5)	 	the Company has executed employment contracts that are in
compliance with the legal requirements with all of its employees, and has
provided insurance coverage and other benefits required by relevant laws,
including but not limited to pension insurance, basic medical insurance
premiums and unemployment insurance premiums, to all of its employees;
	 
	 	(6)	 	Party A has completed the Due Diligence on the Company, Party B
and the Company have provided all the documents relating to the Due Diligence
as required by Party A, and the results of the Due Diligence are satisfactory
to Party A;

2

 

	 	(7)	 	a qualified accounting firm approved by Party A has issued,
prior to the listing date, an unqualified audited financial report of the
Company for the period commencing from 2006 to the year preceding the listing
of the Proposed Listed Company pursuant to currently effective US GAAP, and the
audit results of such report have been approved by Party A;
	 
	 	(8)	 	resolutions approving the Proposed Equity Transfer and the
corresponding amendments to the AoA have been adopted at a meeting of the
Company’s shareholders, and Party B has waived said Party’s right of first
refusal over the Equity Interest to be transferred;
	 
	 	(9)	 	all other legal documents required to be executed by this
Agreement or required to be executed in order to complete the Proposed Equity
Transfer have been duly executed;
	 
	 	(10)	 	the procedures for the amendment of business registration in
respect of the transfer of the Company’s Equity Interest and other relevant
changes have been completed with the Registration Authority;
	 
	 	(11)	 	the Company’s directors originally appointed by Party B have
resigned from their positions in the Company and confirmed in writing that they
have waived any claim of right to severance pay and any other related issues
they may have against the Company;
	 
	 	(12)	 	the registration or filing procedures for the directors and
legal representative appointed by Party A have been made with the Registration
Authority;
	 
	 	(13)	 	the Company has, in accordance with applicable laws and
regulations, established a branch at its actual business address (Suite 403, 88
Caoxi North Road, Xuhui District), or has, to the satisfaction of Party A,
resolved the issue of the discrepancy between the Company’s actual business
address and registered address;
	 
	 	(14)	 	the Company has, in accordance with the law, applied for and
been issued with the Statistics Registration Certificate;
	 
	 	(15)	 	the Company has completed, in accordance with applicable laws
and as required by the competent government authorities, the procedures for the
registration of the establishment of a representative office (if required) in
the area that it actually carries out representational activities for its
business;
	 
	 	(16)	 	the Company has taken all necessary actions to terminate its
business relationship and any other connected relationship with Shanghai Yingji
Culture Communication Co., Ltd. (“Yingji”), and there are no outstanding
contracts existing between the Company and Yingji;

3

 

	 	(17)	 	the Company has sold the 70 percent equity interest it holds in
Shanghai Hongjiu Business Consulting Co., Ltd. (“Hongjiu”) for a price of not
less than Renminbi One Million (RMB1,000,000) and carried out the procedures
for the amendment of business registration in connection with the
aforementioned equity transfer;
	 
	 	(18)	 	the matter under the Share Issuance Agreement concerning paying
the first portion of the Offshore Consideration to Party B has been approved by
the shareholders general meeting/board of directors of the Proposed Listed
Company, relevant PRC government agencies (if required) and other competent
authorities;
	 
	 	(19)	 	the contents of Schedule 1 to Appendix 3, Intellectual
Property, Schedule 2 to Appendix 3, List of Senior Management Personnel,
Schedule 3 to Appendix 3, Exclusive Advertising Sales Agency Contracts, and
Appendix 6, Existing Television Channels, hereto have been updated in line with
the actual circumstances of the Company as at the time of the Closing and
truthfully reflect the Company’s actual circumstances at the time of the
Closing (if any changes in the contents of the Appendices as at the time of the
execution hereof occur prior to the Closing) and such updates have been
confirmed by Party A; such updated Appendices shall constitute an integral part
of, and be as authentic as, this Agreement; and
	 
	 	(20)	 	other obligations that Party A, pursuant to Article 4.1 of this
Agreement, has, after the due diligence, required Party B to complete prior to
the Closing.

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APPENDIX 2.

REPRESENTATIONS AND WARRANTIES

In addition to the matters expressly disclosed in the Disclosure Letter submitted by the Company on
or before the Commencement Date, Party B and the Company give to Party A on the Commencement Date
and the Closing Date the representations and warranties set forth below in respect of the following
matters; each representation or warranty shall be deemed an independent representation or warranty
and shall not (unless otherwise expressly indicated) be limited or constrained by any other
representation or warranty or any other provisions of this Agreement:

	1.	 	No conflict: The execution and performance of this Agreement by Party B and the
Company shall not breach or conflict with any of the provisions of the Company’s AoA or other
organizational documents of the Company or violate any mandatory laws or regulations of the
PRC. Party B and the Company have secured all third party approvals or authorizations
required for the transactions contemplated by this Agreement (including those of competent
government authorities).
	 
	2.	 	Valid existence of the Company and Party B’s Equity: The Company is a duly
established and validly existing limited liability company and its registered capital has been
paid in full. Party B is the lawful owner of the Company’s Equity Interest, is entitled to
the rights attaching to the Equity Interest and undertake the corresponding obligations.
Other than those disclosed by Party B and the Company in the Disclosure Letter, no transfer,
nomination, trust, pledge or any other manner of Encumbrances of or on the Equity Interest
exists in respect of the Equity Interest.
	 
	4.	 	Investments: The Company has no investments in any third parties or has no subsidiary
commercial organizations, including but not limited to subsidiaries, branches, offices or
establishments; as well any other entities directly or indirectly controlled by or in which
the Company has an equity interest, or any other entities in which the Company has an equity
interest.
	 
	5.	 	Information Disclosure: All of the information contained in this Agreement, and all
other information given or provided by the Company and Party B to Party A or any of its
representatives, employees or professional advisors during the negotiations for this Agreement
or any background check or other investigation conducted by Party A (or its representatives)
prior to the execution hereof or prior to the Closing is, at the time of provision, and
continues to be true, complete, accurate and not misleading in all respects. There are no
facts, things or matters that would make any such information untrue, inaccurate or misleading
that have not been disclosed to Party A, and there are no facts, things or matters that are
once disclosed would reasonably affect Party A’s intent to purchase the Equity Interest or
affect the provisions on which Party A’s intent to purchase the Equity Interest is based.
	 
	6.	 	Financial Report: The Company’s audited financial report as at December 31 of the
year preceding the listing (the “Balance Sheet Date”) truthfully, completely and accurately
reflects the Company’s operations and financial position for the relevant periods or on the
relevant reference dates. All of the Company’s audited accounts and unaudited accounts have
been prepared pursuant to the financial and accounting

5

 

	 	 	systems specified in the relevant laws of the PRC with the consideration of the Company’s
actual circumstances, and truthfully and fairly reflect the Company’s financial and
operational conditions as at the relevant accounting dates. The Company’s financial records
and information comply with the requirements of the PRC laws and statutes and satisfy the
PRC accounting standards. The Company’s financial report is an audited financial report
that fully complies with currently effective US GAAP and is issued with an unqualified
opinion.

	7.	 	Undisclosed debts: Other than the debts set forth below, the Company does not have
any debts that are not recorded on its balance sheets: (1) debts disclosed in the Disclosure
Letter; and (2) debts incurred in the ordinary course of business after the Balance Sheet
Date, that are not prohibited by this Agreement and shall not have a material adverse effect
on any shareholder of the Company or the Company itself. Other than those disclosed to Party
A in the Disclosure Letter, the Company has never been required to assume any debts or
liabilities as a result of its holding an equity interest in, or the transfer of its equity
interest in, Hongjiu and there are no outstanding debts or liabilities between it and Honjiu,
nor has the Company ever assumed any obligation in respect of a guarantee, mortgage, pledge or
any form of security provided to a third party nor ever created a mortgage, pledge or other
security interest on its property.
	 
	8.	 	Insurance Coverage:

	 	8.1	 	The Company has insured all of its insurable assets for their entire
replacement value pursuant to the type(s) of insurance that are commonly taken out by
companies that engage in similar business or own similar assets. The insurance taken
out by the Company includes casualty insurance, personal injury and death insurance,
third party liability insurance and other types of insurance commonly taken out by such
companies.
	 
	 	8.2	 	With respect to all such insurance:

	 	(i)	 	to date, the Company has punctually paid all premiums;
	 
	 	(ii)	 	the insurance taken out by the Company on leased immovable
assets is presently valid, and if the Company is responsible for renewing such
insurance, such insurance policies satisfy the requirements in respect of the
lease of any immovable assets in all respects;
	 
	 	(iii)	 	all insurance policies are fully valid; neither the Company
nor the Company’s representative has committed any act or omission, made an
erroneous representation or failed to disclose an event that could render such
insurance policies revocable, or undertaken any action that could render such
insurance polices invalid or unenforceable due to a violation of the law or
other reason, or undertaken any action that breaches the terms, conditions or
warranties of any insurance policy thereby giving an insurance company the
right to refuse to pay all or part of any claim under such policy;

6

 

	 	(iv)	 	with respect to each insurance policy, there are no special or
unusual limitations, terms, exceptions or restrictions, the premiums payable do
not exceed the normal premium rates and there are no circumstances existing
that could cause an increase in the premiums; and
	 
	 	(v)	 	the Company does not have any outstanding claims, and no
circumstances exist that could give rise to any claim.

	9.	 	Capital structure: The Company’s AoA and AoA amendments registered with the
Registration Authority are consistent with the Company’s AoA and AoA amendments provided to
Party A by Party B, and accurately and completely reflect the Company’s capital structure
prior to the Closing. The Company has never in any manner whatsoever undertaken to issue or
actually issued to any third party any of the Company’s equity interest, shares, bonds,
options or rights or interests of identical or similar nature other than the Equity Interest.
	 
	10.	 	No change: During the period between the Balance Sheet Date and the Commencement
Date, the Company has not carried out any of the following acts, unless otherwise provided
herein or disclosed by Party B and the Company to Party A in the Disclosure Letter and
approved in writing by Party A:

	 	10.1	 	prepaid any debt;
	 
	 	10.2	 	provided security to a third party in the form of a guarantee or created a
mortgage, pledge or any other form of Encumbrances on its property;
	 
	 	10.3	 	released any third party from a debt to the Company or waived any right of
recourse;
	 
	 	10.4	 	amended any existing contract or agreement;
	 
	 	10.5	 	paid a bonus to any management officers, directors, employees, sales
representatives, agents or advisors of the Company or increased their income in any
manner, or changed their remuneration or benefits in any manner;
	 
	 	10.6	 	incurred any loss (insured or not) or experienced any change in the
relationship with any supplier, client or employee whereby such loss or change would
have a material adverse effect on the Company;
	 
	 	10.7	 	revised the Company’s accounting methods, policies or principles, or financial
and accounting rules and systems;
	 
	 	10.8	 	transferred or licensed any of the Company’s intellectual property rights to
any third party(ies) other than in the ordinary course of business;
	 
	 	10.9	 	made a material revision or alteration to the Company’s sales practice or
accounting method, or a material change in the Company’s employment policies, rules or
regulations;

7

 

	 	10.10	 	experienced any material adverse change in the Company’s financial position or
sustained any liability arising from a transaction conducted other than in the ordinary
course of business;
	 
	 	10.11	 	adopted any shareholders’ resolution or board resolution different from those
relating to conventional matters discussed and adopted at annual shareholders’ meetings
of the Company, other than resolutions adopted for the purpose of performing this
Agreement;
	 
	 	10.12	 	declared, paid, distributed or committed to, or be in the process of
declaring, paying, distributing or committing to any dividends, bonuses or other forms
of shareholder distribution;
	 
	 	10.13	 	(i) undertaken any asset sale, mortgage, pledge, lease, assignment or other
disposal other than in the ordinary course of business whereby the total transaction
amount exceeds Renminbi Two Hundred Thousand (RMB200,000); (ii) disposed of any fixed
assets or approved the disposal or acquisition of any fixed assets of the Company other
than in the ordinary course of business, relinquished any rights in any of the assets
owned by the Company, entered into any contract that resulted in the alienation of any
fixed assets or gave rise to any other liabilities; (iii) made any expenditure
exceeding Renminbi Two Hundred Thousand (RMB200,000) in total or any purchase of
tangible or intangible assets (including equity investment in any company) other than
in the ordinary course of business the value of which exceeds Renminbi Two Hundred
Thousand (RMB200,000);
	 
	 	10.14	 	undertaken any transaction or act other than in the ordinary course of
business; or
	 
	 	10.15	 	committed any act or omission that could lead to any of the aforementioned
circumstances.

	11.	 	Taxation: The Company has punctually paid all taxes and government charges, made all
filings, issued all notices and provided all other information that it is required to provide
to any taxation authority or other government agency by the deadlines specified in the
relevant laws. All such information is complete and accurate in all material respects; and
all filings and notices are complete and accurate in all material respects and are made and
issued on the appropriate basis. The Company is not required to pay any taxes in arrears, pay
surtaxes or accept other tax investigations, there are no facts that could trigger such an
investigation, it has not received or no notice has been issued for the recovery taxes from
the Company by any third party or of a dispute concerning any tax break provided to the
Company. The Company is not or has ever been liable to pay interest on outstanding taxes.
	 
	12.	 	Assets:

	 	12.1	 	A specific breakdown of all of the fixed and intangible assets lawfully owned
and used by the Company is set forth in item 12 of the Disclosure Letter.

8

 

	 	12.2	 	All of the Company’s assets are entirely the Company’s property as at the
Balance Sheet Date. Other than those that will be disposed of or repaid in the normal
course of business in future, all such assets as well as all assets and liabilities
acquired or arising in the future are or will be entirely the Company’s property, are
not the subject of any transfer or Encumbrance (other than liens legally arising in the
ordinary course of business) and are not the subject of any installment payment,
conditional sale or credit sale agreement.
	 
	 	12.3	 	All such assets are occupied (if they can be so occupied) by the Company or
under the Company’s control, or the Company has the right to occupy or control the
same. All such assets are located in the PRC.
	 
	 	12.4	 	The assets owned or leased by the Company constitute all of the property,
rights and assets required by it to fully and effectively carry on its existing
business or to facilitate its engagement in business.

	13.	 	Immovable assets: The Company does not have any real estate or related rights,
interests or obligations. However, it does have valid and binding lease interests; such lease
interests are intact and free and clear of any Encumbrances and no third party has asserted
that it has rights or interests of senior priority in such lease interests. With respect to
the property or assets leased by the Company that have a substantive connection with its
operations, the Company is in compliance with the lease terms therefor, has valid lease
interests in such assets, and they are free and clear of any liens, Encumbrances or security
interests or of claims by any third party other than the lessor of such property or assets.
	 
	14.	 	Contracts:

	 	14.1	 	Party B and the Company have, as required by Party A, provided to Party A or
third parties designated by it photocopies, that are true to the originals, of all of
the Company’s existing and valid written contracts and warrant that all such contracts
are valid and enforceable by law.
	 
	 	14.2	 	None of the business contracts entered into by the Company has become invalid,
been rescinded or granted the counterparty the right to unilaterally terminate the same
pursuant to the provision of any laws and to the knowledge of Party B and Company,
currently and until the Closing Date, there is no possibility for such risk to arise.
	 
	 	14.3	 	The Company is not and has never been a party to a contract, arrangement,
undertaking or agreement as set forth below:

	 	(i)	 	a contract, arrangement or undertaking outside the ordinary
course of business;
	 
	 	(ii)	 	a contract, arrangement or undertaking not entirely reached on
an equitable and commercial basis;
	 
	 	(iii)	 	a loss-making contract, arrangement or undertaking (i.e. one
that is known to potentially result in a loss once performed);

9

 

	 	(iv)	 	a contract, arrangement or undertaking that would be impossible
without any difficulties to complete or perform on schedule without the
commitment of particularly large or unusual expenditures or efforts;
	 
	 	(v)	 	a contract, arrangement or undertaking not signed by the
Company as a party but that is, in fact, being performed by the Company; or
	 
	 	(vi)	 	other than as disclosed to Party B in the Disclosure Letter, a
consent to become a member of any joint venture, consortium, partnership or
other unincorporated organization (other than a recognized industry
association).

	 	14.4	 	The Company is not in breach of any of the terms or obligations under any
contract, agreement or document to which the Company is a party or which is binding on
the Company.
	 
	 	14.5	 	All of the exclusive advertising sales agency contracts entered into by the
Company with the relevant television channels as set forth in Schedule 3 of Appendix 3
are valid and legally enforceable.

	15.	 	Intellectual property: Other than those that have been disclosed to Party A in the
Disclosure Letter, the Company has the lawful ownership of or the right to use all of the
intellectual property (including but not limited to patents, trademarks, copyrights,
proprietary technologies, domain names and trade secrets, etc.) that it currently uses, and
the Company has secured all necessary authorizations and licenses for the intellectual
property rights (including but not limited to copyright licenses for the value added services
that it provides) used in its business activities, but owned by third parties. The Company
has not infringed any intellectual property, trade secrets, proprietary information or other
similar rights of third parties and there are no pending or threatening claims for damages,
disputes or legal proceedings in respect of the Company’s infringement of the intellectual
property, trade secrets, proprietary information or other similar rights of any third parties.
The trademarks, patents, software copyrights and domain names owned by the Company have been
duly registered in accordance with the law. The information regarding the intellectual
property that the Company owns or has the right to use as set forth in Schedule 1 of Appendix
3 is true, accurate, complete and not misleading.
	 
	16.	 	Litigation: None of the circumstances set forth below that could have a material
adverse effect on the Company or the formation, validity and enforceability of this Agreement
or the Proposed Equity Transfer under this Agreement exists (regardless whether it is
completed, pending or threatening or not):

	 	16.1	 	sanctions or restrictions imposed on the Company by a radio station, television
station or any organization that has the capacity to restrict or materially affect the
Company’s business;
	 
	 	16.2	 	a penalty, injunction or order against the Company by a competent government
authority; or

10

 

	 	16.3	 	a civil, criminal or administrative action, arbitration or other similar
proceeding or dispute against or with the Company.

	17.	 	Legal Compliance: Other than those that have been disclosed by the Company in the
Disclosure Letter, the business currently engaged in by the Company complies with the current
and valid laws, statutes, regulations and other administrative regulations issued by competent
state government authorities (hereinafter collectively referred to as “Statutes”), and the
Company has not violated any Statutes, such as would lead to a material adverse effect on the
business or assets operated by the Company.
	 
	18.	 	Employees: The Disclosure Letter sets forth the basic particulars of all of the
Company’s employees (including but not limited to the name, age, position, employment contract
term, salary or wage level, details on the payment of social insurance, etc.) and, in
particular, sets forth further information on employees who have executed an employment
contract with the Company (including but not limited to identifying the entity with whom the
actual employment relationship is maintained, and the status of such employment (i.e., through
a staffing/placement agency, currently in retirement or under a contractual arrangement
whereby social insurance is being maintained)). Other than as disclosed to Party A in the
Disclosure Letter:

	 	18.1	 	the employment of staff by the Company has complied with the applicable labor
laws and regulations;
	 
	 	18.2	 	there are no labor disputes or controversies or potential labor disputes or
controversies existing between the Company and its current or former employees;
	 
	 	18.3	 	the Company does not have any severance pay outstanding and owing due to the
termination of the employment with an employee and is not under obligation to pay
similar compensation or damages in connection with the employment with an employee; and
	 
	 	18.4	 	the Company has paid in full and/or withheld in accordance with relevant laws
and statutes pension, housing, medical, unemployment and all other social insurance
premiums and allowances or employee benefits payable for its employees as specified in
relevant laws or agreements, and no existing or potential dispute exists in respect of
such social insurance premiums and allowances or employee benefits.

	19.	 	Other establishments: Other than those that have been disclosed by the Company in the
Disclosure Letter, the Company does not have any branches or offices nor does it have any
long-term investments, such as holding equity, etc., in any other company or enterprise.
	 
	20.	 	Competing Business:

	 	20.1	 	None of the parties comprising of Party B directly or indirectly holds any
interests in any entity or sector that competes with or is similar to the Company or in
any sector that could be in competition with the business of the Company.

11

 

	 	20.2	 	Except as disclosed in the Disclosure Letter, Yingji has never conducted or
engaged in business that competes with, or is similar to, that of the Company.

	21.	 	Special representations and warranties of Party B and the Company: In addition to the
foregoing general representations and warranties, Party B and the Company jointly make the
following representations and warranties:

	 	21.1	 	all of the Company’s documents, including books of account, records of change
in the Equity Interest, financial statements and all other records of the Company, are
kept in accordance with the standard commercial practice and are entirely in the
possession and control of the Company, and the Company has accurately and compliantly
recorded all information on the major transactions relating to its business;
	 
	 	21.2	 	as at the Closing Date, all of the Company’s documents, including minutes of
board and shareholders’ meetings and the register of shareholders, have been
consistently and duly maintained, and completely and accurately record all matters that
ought to be recorded in such documents;
	 
	 	21.3	 	since the Balance Sheet Date: (i) other than in the ordinary course of
business, no event that could trigger the calling of the Company’s debts has occurred;
(ii) other than in the ordinary course of business, none of the Company’s property has
been disposed of or removed from the Company’s possession and the Company has not
executed any agreements that could result in any financial expenditures not in the
ordinary course of business or give rise to any liabilities not in the ordinary course
of business;
	 
	 	21.4	 	the Company has, as required, submitted all necessary information to the
competent taxation authorities; no dispute over the Company’s tax obligations,
potential tax obligations or tax breaks exists between the Company and the taxation
authorities;
	 
	 	21.5	 	the Company has duly retained all financial information used in normal tax
records and tax payments, as well as all information on any tax breaks the granting of
which has been approved by the competent government authorities; and
	 
	 	21.6.	 	other than the employee benefits, and social and pension security required by
the Labor Law of the People’s Republic of China, the Law of the People’s Republic of
China on Employment Contracts and other related regulations, the Company does not have
any employment, retirement or pension benefit or security systems or measures for its
employees.

12

 

APPENDIX 3.

SCHEDULE 1. INTELLECTUAL PROPERTY

A            Intellectual property owned by the Company

B            Intellectual property licensed to the Company

[None]

13

 

APPENDIX 3.

SCHEDULE 2. LIST OF SENIOR MANAGEMENT PERSONNEL

Weidong Zhu

Managing Director. He formerly worked in the media department of such international advertising
companies as J. Walter Thompson, Grey, etc., serving clients that included such famous
international corporations as Palmolive. He was previously responsible for the operation of Dragon
TV, Shanghai TV and Shanghai Education Television Station projects, as well as television media
projects in such places as Zhejiang, Henan, Hubei, Sichuan, etc.

Zhenhui Wang

Deputy General Manager. He formerly worked in the media department of such international
advertising companies as McCann-Erickson, Dentsu, etc., serving clients that included such famous
international corporations as Johnson & Johnson. He previously was involved in the operation of
television media projects, such as Shanghai TV’s sports program, Shanghai TV’s documentary channel,
etc.

Shengyang Zhu

Director of Administration. He formerly served as director of the advertising department of
Shanghai Cable TV, enabling Shanghai Cable TV’s advertising business to achieve outstanding growth
during his term of service. He has maintained long-term close relationships with numerous persons
in charge of television media in the PRC. He was previously involved in the operation of
television media projects in such places as Shanghai, Fujian, etc.

Li Sun

Financial Controller, Chartered Accountant. [He] formerly served in important financial positions
with such joint ventures as Shanghai Captaino Garment Co., Ltd., etc. and international advertising
companies as Dentsu, etc. [He] has extensive experience in fund allocation and prospect
forecasting for numerous projects.

Zongyu Feng

Director of Business. He is currently responsible for the operation of the Tianjin Television
Sports Channel project. He has been engaged in media operations work in advertising companies for
many years and has established a wide range and solid cooperation foundation with clients.

14

 

Yu Wei

Director of Business. He is currently responsible for the operation of the Nanjing Life Channel
and Entertainment Channel projects. He has been engaged in media operations work in advertising
companies for many years and has established a wide range of solid cooperative foundation with
clients.

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APPENDIX 3.

SCHEDULE 3. EXCLUSIVE ADVERTISING SALES AGENCY CONTRACTS

16

 

Sichuan Science & Education Channel

Ad-agency Cooperation Agreement 2009

Party A: Chengdu Tiandi Tongchuang Advertising Co., Ltd.

Party B: Shanghai Yarun Media Culture Co., Ltd.

Whereas, Party A has entered into an agreement with Sichuan TV Station Science & Education Channel,
under which Party A may obtain the ad-agency right to certain slots, and Party B is an advertising
company with rich experience in media operation, NOW, THEREFORE, the Agreement is made by and
between the Parties through sufficient and amiable negotiation in connection with cooperative
operation of certain advertising slots on “Sichuan TV Station Science & Education Channel” in
accordance with the Contract Law of the People’s Republic of China and other laws and regulations
on advertising administration.

1. Cooperation Projects

1.1 The cooperation projects hereunder shall be the advertising slots for the following programmes
on Sichuan Science & Education Channel:

	 	 	 	 	 
	17: 35—19: 10

	 	Film Discussion
	 	17-minute advertising time
	21: 30—22: 00

	 	City Stories
	 	6-minute advertising time
	22: 00—24: 00

	 	Overseas Theater
	 	22-minute advertising time
	12: 05—13: 40

	 	Film Discussion (replay)
	 	17-minute advertising time
	13: 50—14: 20

	 	City Stories (replay)
	 	6-minute advertising time
	14: 35—16: 40

	 	Overseas Theater (replay)
	 	22-minute advertising time

In total 90-minute advertising time every day.

1.2 The agency period shall be from January 1, 2009 to December 31, 2009.

2. General Principles of Cooperation

2.1 Party B shall ensure the accomplishment of the minimum business volume for the project in the
year, namely, RMB13, 000,000; otherwise, Party B shall be responsible for making up the balance, if
any.

2.2 Party B shall pay RMB1,000,000 to Party A as the performance bond, which may be used to offset
the advance payment for ad-agency right at the time of payment on November 25, 2009.

2.3 Profit distribution: if the balance of the annual business volume after deduction of 25% of the
operating costs of the Parties is less than RMB13,000,000, the difference shall be compensated by
Party B; if the balance is more than RMB13,000,000, the excess shall be distributed to the Parties
according to the following proportion: 30% to Party A and 70% to Party B. The Parties shall be
responsible for their respective taxes payable.

3. Payment Method and Deadline for Ad-agency Fee

3.1 Party B agrees to pay RMB1,000,000 to Party A as the performance bond within fifteen (15) days
from the effective date of the Agreement.

3.2 Party B shall, as of the effective date of the Agreement, pay RMB1,083,300 in advance as the
advertising fee of the following month to the account designated by Party A on or prior to the
25th day of every month. The initial payment shall be remitted to the account

17

 

designated by Party A on or prior to December 25, 2008. No payment shall be required where the
amount paid reaches RMB13,000,000 (including RMB1,000,000 as the performance bond).

4. The Parties agree that

1) Party A shall ensure that Sichuan TV Station Science & Education Channel can provide the agency
qualification certification to Party B in time;

2) Party A shall ensure that the agency agreement with Sichuan TV Station Science & Education
Channel remains effective and valid in 2009;

3) Party B shall take charge of formulating such policies on advertising rate, discount and bonus,
which shall be implemented strictly upon formulation;

4) Party B shall take charge of business with clients out of Sichuan; all orders and release
agreements shall be submitted to Party A in writing for record filing.

5) Party A shall take charge of local clients in Sichuan; all orders and release agreements shall
be submitted to Party B in writing for record filing. The business volume shall be reckoned in the
minimum business volume, and the advertising fee shall be deducted from the deposit payable by
Party B on the 25th day of the next month after the broadcasting day;

6) Party B shall have the priority in case of any conflicts between clients of the Parties;

7) Party B may develop local clients in Sichuan where the release volume of the first quarter is
less than RMB500,000;

8) Party B shall take charge of arrangement for advertisement position and preparation of
advertising orders or copies;

9) Party A shall take charge of coordination with Sichuan TV Station Science & Education Channel;

10) The Parties shall check the operation and finance conditions (written records) once every
month; and

11) The agreement between Party A and the Station shall be deemed as an appendix to the Agreement.

5. Liability for Breach of Contract

5.1 Where Party A intends to terminate the Agreement unilaterally other than as a result of force
majeure within the term hereof, it shall express its intention at least two (2) months in advance
and compensate RMB1,083,300 to Party B.

5.2 Where Party A intends to terminate the Agreement unilaterally as a result of force majeure
within the term hereof, it shall notify Party B in advance. Where the advertisements provided by
Party B cannot be broadcast completely or in good quality or in full quantity, and can not be
prolonged, the ad-agency fee of RMB1,083,300 in the current month shall be refunded to Party B.

5.3 Where Party B fails to pay the ad-agency fee to Party A according to the schedule and amount
agreed herein, it shall pay the late fee to Party A at the rate of
0.5‰ of the amount payable for
each day overdue; in case of non-payment within 25 days from the due day, Party A shall have the
right to terminate the Agreement.

18

 

5.4 Where Party B fails to perform the Agreement, the performance bond shall first be used to
offset the insufficient amount of the monthly ad-agency fee hereunder. In case Party B fails to
perform the Agreement, the performance bond shall not be refunded.

5.5 Where Party B cannot perform the Agreement due to improper management within the term of the
Agreement, it shall propose to terminate the Agreement at least two (2) months in advance and
compensate one-month ad-agency fee to Party B, namely, RMB1,083,300.

5.6 Each party shall be solely and fully responsible for those advertisement contents and release
procedures of its own clients which are in violation of laws, regulations and decrees.

6. Dispute Settlement

All disputes arising from the performance of the Agreement shall be settled through negotiation
between the Parties; where negotiation fails, the dispute concerned shall be submitted to the
People’s Court with jurisdiction at the place where either party is located.

7. The Agreement shall be made in two copies with equal legal force, one for each party. The
Agreement shall take effect with signatures and official seals by the Parties’ authorized
representatives. Any matter uncovered herein may be specified in a supplementary agreement, which
shall be deemed as an appendix to the Agreement; In case of any conflicts between the supplementary
agreement and the Agreement, the former shall prevail.

Party A (seal): Chengdu Tiandi Tongchuang Advertising Co., Ltd.

Authorized representative (signature):

Add.:

Date: December 5, 2008

Party B (seal): Shanghai Yarun Media Culture Co., Ltd.

Authorized representative (signature):

Add.: Room 403, Sheng’ai Plaza, No. 88 Caoxi N. Road, Shanghai, China

Date: December 5, 2008

Appendix: Ad-agency Contract between Party A and Sichuan TV Station Science & Education Channel

19

 

Exclusive Agency Contract

for

Advertisements on Tianjin TV Station Sports Channel

Party A:[Tianjin TV Station Advertising Department]

Agent:

Add.: 3/F, Tianyu Hotel, No. 19 Diantai Street, Heping District, Tianjin, China

Party B: Shanghai Yarun Media Culture Co., Ltd.

Agent: Weidong Zhu

Add.: Room 403, Sheng’ai Plaza, No. 88 Caoxi N. Road, Shanghai, China

The Contract (“Contract”) is made by and between the Parties through amiable negotiation concerning
the exclusive right to advertisements on Tianjin TV Station Sports Channel and in accordance with
the Contract Law of the People’s Republic of China, the Advertising Law of the People’s Republic of
China and other applicable laws and regulations.

Article 1 Subject Matter

Exclusive right to advertisements on Tianjin TV Station Sports Channel.

Article 2 Agency Period

From March 1, 2009 to December 31, 2011.

Article 3 Grant of Ad-agency Right

3.1 According to the terms and conditions of the Contract, Party A agrees to grant Party B the
exclusive right to advertisements on Tianjin TV Station Sports Channel from March 1, 2009 to
December 31, 2011, particularly from power on at 7:00 every day to power off at about 2:00 before
dawn of the next day, as well as during games transmission before dawn. The advertising period will
be 228 minutes per day; in case of excess, the Parties shall negotiate about the payment standards
otherwise.

3.2 The advertising patterns to the extent of the exclusive right granted to Party B include brand
ads, special ads, programme naming, background panel, table-edge board and corner mark. With
respect to large-scale games or activities hosted by Tianjin TV Station and undertaken by Sports
Channel, Party B shall have the right to insert advertisements in live or video broadcast, provided
that such rights and interests as activity naming, special broadcast, background board and dresses
shall vest in Party A. Party A shall have the right to decide on the advertising patterns and
contents.

3.3 The film advertisements of the programmes on Party A’s Sports Channel shall not be in the
agency scope of Party B. However, film advertisements must be provided by film operators and
broadcast together with the programmes, and separation or removal is prohibited. However, the
proportion of the length of film

20

 

advertisements to that of the programmes concerned shall be reasonable and notified to Party A in
advance.

Article 4 Rights and Obligations of the Parties

4.1 Party A’s rights and obligations

1) Party A shall coordinate with Tianjin TV Station Sports Channel to ensure the relative stability
of the programmes and advertising slots on the channel as far as possible. However, Tianjin TV
Station Sports Channel shall have the right to adjust reasonably the programmes on the channel
according to the overall programme arrangement of Tianjin TV Station. Within the term of the
Contract, the programme arrangement of Tianjin TV Station Sports Channel shall be subject to the
programme schedule provided by the Channel in the current year. Party A shall have the right to
adjust reasonably the prevailing programme schedule according to the demands for games
transmission, provided that Party A shall notify Party B three (3) working days in advance of
temporary adjustment, or two (2) weeks in advance of material revision.

2) Party A shall coordinate with Tianjin TV Station Sports Channel to ensure the transmission
(including, but not limited to, live broadcast, recorded broadcast and delayed broadcast) of
regular games of the previous years on the Channel as far as possible. With respect to
international and domestic major sports games, Tianjin TV Station Sports Channel shall do its
utmost to make coordination to transmit and report such games as far as possible. Failure to
transmit certain games due to “reasons not attributable to Tianjin TV Station Sports Channel” shall
not constitute Party A’s breach of contract, provided that Party A shall inform Party B in advance.

3) Party A shall be responsible for final examination and broadcasting of the advertisement
contents and patterns. Party A shall have the right to refuse to broadcast the advertisements which
are not examined, in which case, Party B shall assume relevant liabilities arising therefrom.

4) Party A shall ensure that the advertising time of Tianjin TV Station Sports Channel will conform
to the provisions of the State Administration of Radio Film and Television.

5) Party A shall have the right to adjust the programmes on Tianjin TV Station Sports Channel as
required by significant publicity tasks of the Country and Tianjin Municipality, provided that
Party A shall inform Party B of the adjustment information in advance.

6) Party A shall arrange and broadcast advertisements strictly according to the release sheets and
orders provided by Party B and provide Party B with the broadcasting certifications issued by a
third person broadcasting supervision company in time. In case of any errors and omissions due to
any reason attributable to Party A, Party A shall take remedies on the principle of “once for each
error and twice for each omission”.

7) Except for film advertisements and propaganda films concerning channels and columns according to
Article 1.3 hereof, Party A may not broadcast any paid advertisement in any form. Where the volume
of the advertisements solicited by Party B fails to reach the maximum capability of Tianjin TV
Station Sports Channel, Party A shall have the right to broadcast various propaganda films of
Tianjin TV Station.

21

 

8) Party A shall coordinate with Tianjin TV Station Sports Channel to broadcast more games and
improve programme quality as far as possible and do its utmost to ensure that the Channel can
obtain more satisfactory results in audience rating in 2009, 2010 and 2011.

9) Party A shall release the programme introduction and advertising information of Tianjin TV
Station Sports Channel on relevant pages of the websites of Tianjin TV Station. In case of any
change, Party A shall do its utmost to correct relevant information on the websites in time.

10) Party A shall have the right to fix the advertising price of Tianjin TV Station Sports Channel
in 2009, 2010 and 2011 for the purpose of unifying the advertising rates of all channels of Tianjin
TV Station.

11) Party A shall issue to Party B certain certification documents such as “Exclusive Agency
Qualification for Advertisements on Tianjin TV Station Sports Channel”.

4.2 Party B’s rights and obligations

1) Party B may exercise its exclusive agency rights to programs on Tianjin TV Station Sports
Channel on the principle of self-promotion and self-operation.

2) Party B shall own all incomes earned from all advertisements under its exclusive agency right.
Advertising rights and interests concerning competitions and interaction sections (including, but
not limited to, short message, telephone and voice calls) of various programmes on Tianjin TV
Station Sports Channel, as well as relevant incomes, shall be distributed to the Parties according
to the agreed proportion; such incomes shall not be reckoned in the total amount of exclusive
ad-agency in any year and shall be specified in the supplementary agreements.

3) Party B shall ensure to make payment to Party A on schedule according to the payment methods as
mentioned herein.

4) The advertisements released by Party B shall conform to the provisions of the Advertising Law of
the People’s Republic of China.

5) During the performance of the Contract, Party B may promote Party A’s “programmes and
advertising business on Tianjin TV Station Sports Channel” to which Party B has the operation right
on Internet in its own name.

6) Party B shall have the right to invite advertising investment in the name of “exclusive ad-agent
of Tianjin TV Station Sports Channel”.

7) With respect to various advertisements (including, but not limited to, brand ads, special ads,
title naming, sponsor billboard, corner mark, background panel and table board) designed, shot and
produced by Party A at Party B’s requests, Party A will charge the fee from Party B according to
the charge standards of Tianjin TV Station for advertisement production.

Article 5 Performance Bond and Payment Method

5.1 The exclusive agency fee from March 1, 2009 to the end of February, 2010 shall be
RMB40,000,000, and Party B shall pay the agency fee of the following month on the 25th
day of every month, namely, RMB3,333,300. The exclusive agency fee from March 1, 2010 to the end of
February, 2011 shall be RMB43,000,000, and Party B shall pay the agency fee of the following month
on the 25th day of every month, namely, RMB3,583,300. The exclusive agency fee from
March 1, 2011 to the end of

22

 

December, 2011 shall be RMB42,000,000, and Party B shall pay the agency fee of the following month
on the 25th day of every month, namely, RMB4,200,000. The buyout agency fee for the
three years shall be RMB125,000,000.

5.2 Party B shall, after executing the Contract, pay the deposit (10% of the committed advertising
amount in the year) to Party A on the lump-sum basis within the term of the Contract. The detailed
schedule and amount shall be as follows:

Prior to February 25, 2009, paying RMB4,000,000 to Party A as the performance bond in 2009;

Prior to February 25, 2010, paying RMB4,300,000 to Party A as the performance bond in 2010;

Prior to February 25, 2011, paying RMB4,200,000 to Party A as the performance bond in 2011;

Party B’s failure to pay the deposit on schedule shall constitute a breach of contract and entitle
Party A to terminate the Contract immediately. The deposit may b used to offset the balance of the
advertising fee in the year only when Party A accomplishes the committed advertising volume on
schedule in the year; otherwise, Party A shall have the right to make deduction from the deposit.

Article 6 Rescission of the Contract

Either party hereto that intends to rescind the Contract must issue a notice to the other party
sixty (60) days in advance, and may not rescind the Contract without the consent of the other
party.

Article 7 Liability for Breach of Contract

7.1 Party B’s failure to make payment to Party A within the agreed period herein shall entitle
Party A to immediately cease broadcasting various advertisements arranged by Party B

7.2 Either party hereto that terminates the Contract without justified reasons or in violation of
the terms of the Contract shall pay the penalty to the other party at the rate of 10% of the total
amount of annual exclusive agency.

Article 8 Miscellaneous

8.1 Neither party shall be responsible for its delay in performing the Contract or failure to
perform its obligations hereunder as a result of force majeure within the term of the Contract,
provided that the affected party shall take necessary, proper and reasonable measures in time to
minimize the losses arising therefrom. The Parties may decide through negotiation in good faith
whether to rescind the Contract, to release part of obligations hereunder or extend the performance
period according to the impacts upon the Contract due to force majeure.

The affected party shall inform the other party of the force majeure event in writing within two
(2) days upon occurrence of the event, and, within fifteen (15) days upon occurrence of the event,
provide the details about the force majeure event and relevant valid certifications and documents,
proving that the Agreement cannot be performed completely or partially or needs be extended.

Force majeure means 1) natural disaster which cannot be overcome; 2) war, fire and explosion; 3)
other events which cannot be foreseen, prevented or avoided.

23

 

8.2 Neither party may transfer the Contract or any of its rights or obligations hereunder without
the other party’s prior written consent.

8.3 The Parties shall procure their respective personnel aware of the Contract not to disclose the
Contract.

8.4 The Contract shall be made in Chinese in four copies with equal legal force, two for each
party.

8.5 The Contract shall become effective immediately with signatures and seals of the Parties.

	 	 	 
	Party A: Tianjin TV Station 

Advertising Department

	 	Party B: Shanghai Yarun Media
Culture Co., Ltd.
	 
	 	 
	Representative (signature):

	 	Representative (signature):
	 
	 	 
	Date:

	 	Date:

24

 

Ad-agency Contract

Party A (Board Owner): Wuhan Broadcasting & TV Station Advertising Department

Party B (Board Buyer): Shanghai Yarun Media Culture Co., Ltd.

The Contract is made by and between the Parties through sufficient negotiation concerning Party B’s
successful bid for the advertising slot on Party A’s WHTV-5, on the principles of good
faith, equality and mutual benefit in accordance with the Contract Law of the People’s Republic of
China, the Advertising Law of the People’s Republic of China, the Instructions on Advertising Bids
2008 of Wuhan Broadcasting & TV Station and other pertinent regulations.

1. The agency period shall be from January 1, 2008 to December 31, 2009. The
detailed advertising slots and boards are as follows:

Daytime and evening advertising slots on WHTV-5, and naming right of sports games advertisements on

sports columns on the channel. Art column on the channel, advertising slots and resources in
connection with important entertainment evenings and large-scale activities arranged by the
Broadcasting & TV Bureau shall not be the subject matter of the Contract. The total advertising
time shall be subject to pertinent regulations of the State Administration of Radio Film and
Television, but in no case may exceed 20% of the duration of the programme. In case of adjustment
of the advertising slots due to channel revision, the adjusted schedule shall prevail.

2. The total amount of the accepted advertising fee is RMB eleven million one hundred and
seventy thousand only in 2008 and RMB twelve million two hundred and eighty-seven thousand
only in 2009.

3. Party B shall submit the proposed advertisement video tapes to Party A for examination and
confirmation at least five (5) working days in advance. Advertisement broadcasting shall comply
with national and local advertising laws and regulations; otherwise, Party A shall have the right
to refuse broadcasting or even terminate the Contract in case of serious default.

4. Party B’s advertisements may not go beyond the agreed time and standards; otherwise, Party A
shall have the right to refuse broadcasting.

5. Advertisement production and release shall comply with Party A’s regulations.

6. No compensations shall be made for any change in the original advertising slots as a result of
force majeure, act of government or revision of channels. In case of long-term revision, the
Parties may negotiate about resolutions in light of actual circumstances.

7. Payment Method

1) Party B shall, within three (3) days after winning the bid, pay the performance bond at 20% of
the accepted bid price (the bid bond paid at the time of registration shall be converted
automatically to the performance bond), namely, RMB two million two hundred and thirty-four
thousand only. Failure to make payment within the specified period shall constitute Party B’s
waiver.

2) Party B must make payment ten (10) days in advance on a monthly basis, namely, adverting fee for
January, 2008 shall be paid prior to December 21, 2007, advertising

25

 

fee for February, 2008 prior to January 21, 2008 and so on. Failure to pay in full amount the
advertising fee on schedule and unauthorized transfer of the bid (subcontract) shall constitute
Party B’s breach of contract. In case Party B breaches the Contract during the performance of the
Contract, the performance bond shall not be refunded and the advertising slots concerned shall be
withdrawn by Wuhan Broadcasting & TV Station Advertising Department, without any further notice.

8. In case of errors or omissions due to any reason attributable to Party A, remedies shall be
taken on the principle of “once for each error” and “twice for each omission”.

9. Party A may not insert any content (whether advertisements or not) in any way during the slots
to which Party B has the exclusive right unless Party B’s consent is obtained and Party A makes
compensations to Party B by means of another slot with equivalent value. Where Party A inserts any
content without Party B’s consent, Party A shall pay the advertising fee to Party B on the basis of
the executive price.

10. Where Party A intends to insert public service advertisements and political advertisements
during the slots to which Party B has the exclusive right, Party B’s prior consent shall be
obtained. Any matter uncovered herein may be specified in writing through negotiation between the
Parties as the supplementation to the Contract. Such supplementations shall have the same legal
force with the Contract.

11. Any and all disputes arising from the performance of the Contract shall be settled through
amiable negotiation; where negotiation fails, the dispute concerned shall be submitted to Wuhan
Arbitration Committee for arbitration.

12. The Contract shall be binding upon the Parties once signed. Each party shall perform the terms
of the Contract strictly and may not terminate the Contract at will. The first breaching party
shall assume all liabilities for breach of contract other than attributable to force majeure
(including national and government policies).

13. Wuhan Broadcasting & TV Station Advertising Department reserves the right to interpret the
Contract.

14. The Contract shall be made in four copies, two for each party. The Contract shall take effect
with signatures and seals and remains effective for two years.

15. Appendices to the Contract: relevant valid certificates

	 	 	 
	Party A: Wuhan Broadcasting & TV
	 	Party B: Shanghai Yarun Media
	Station Advertising Department
	 	Culture Co., Ltd.
	 
	 	 
	(seal)
	 	(seal)
	 
	 	 
	Representative (signature):
	 	Representative (signature):
	 
	 	 
	Date: December 24, 2007
	 	Date:
	 
	 	 
	Add.: No.620 Jianshe Avenue, Hankou,
	 	Add.: Room 403, Sheng’ai Plaza, No.
	430015
	 	88 Caoxi N. Road, Shanghai, 200030
	 
	 	 
	Tel: 027-85722373
	 	Tel: 027 64381260
	 
	 	 
	Fax: 027-85766597
	 	Fax:027-64383327
	 
	 	 
	Post code: 430015
	 	Post code: 200030

26

 

APPENDIX 4.

INTELLECTUAL PROPERTY PROTECTION AND NON-COMPETE

AGREEMENT

[None]

27

 

APPENDIX 5.

NON-DISCLOSURE AGREEMENT

[None]

28

 

APPENDIX 6.

EXISTING TELEVISION CHANNELS

1. Sports Channel of Tianjin TV

2. WHTV-5

29

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