Document:

Unassociated Document

 Exhibit 10.25 

 

 STOCK TRANSFER AGREEMENT 

 (CHINESE OMITTED) 

 

 Dated January 24, 2007 among 

 

	
 Sellers: 

	
 Zhang Lina (CHINESE OMITTED), China ID Number: 310110197508045828 

	
    

	
 Zhang Qinxiu (CHINESE OMITTED), China ID Number: 310101194303143627 

	
 Purchaser: 

	
 Grown Winner International Limited, a company incorporated in the Hong Kong Special Administrative Region, the address of which is 21/F., Chinachem Century Tower, 178 Gloucester Road, Wanchai, Hong Kong. 

 

 WHEREAS 

 

 (A) Shanghai Quo Advertising Company Limited <<(CHINESE OMITTED>> (hereinafter referred to as “the Company”) is registered in the People’s Republic of China with limited liability and with registered share capital of RMB3,000,000.00 A brief introduction of the Company is set out in Appendix 1 to this Agreement. 

 

 (B) As of the date of this Agreement, the Sellers hold 100% of the Company’s registered capital. 

 

 (C) As of the date of this Agreement, the Purchaser’s holding company, Network CN Inc. (“NWCN”), is listed on the OTCBB in the United States (trading code: NWCN). 

 

 (D) Zhang Lina agrees to sell 90% of Company’s equity stockholding held on the Date of Agreement and Zhang Qinxiu agrees to sell 10% of Company’s equity stockholding held on the Date of Agreement, and the Purchaser agrees to buy 100% of the Company’s shares (“Sale Shares”) beneficially owned by the Sellers. The particulars of the Sellers and the Sale Shares are set out in “Appendix 2” to this Agreement. 

 

 It is hereby agreed as follows: 

 

 1. Definitions 

 

 1.1 In this Agreement, unless the context otherwise requires or expressly provides, the following words shall have the following meanings respectively 

 

  

  

  

 

 “Agreement” means this agreement as amended and/or supplemented from time to time in accordance with provisions herein; 

 

 “Board” means the board of directors of the Company 

 

 “Business Day” means a day, other than a Saturday or any 8th typhoon or rainstorm warning day, on which banks are open for business in Hong Kong Special Administrative Region; 

 

 “Company” has the meaning as stated in Recital (A); 

 

 “Company Law” means the Companies Ordinance of the Hong Kong Special Administrative Region 

 (Chapter 32); 

 

 “Completion Date” means the date which is 10 business days after the day on which the condition set out in Clause 3.1 has been complied with and satisfied by the purchaser, or exempted; 

 

 “Completion” means the Completion of the sales and purchase of the shares of the company in accordance with his Agreement; 

 

 “Purchase Price” means the price set out in Clause 4.1 hereof, being the price payable by the Purchaser hereunder. 

 

 “Director(s)” means the directors of the Company or any one of them, as the case may be; 

 

 “Pledge or Mortgage” means the pledge or mortgage of any assets, rights or similar interest (except those specially required by law) and including debenture loans and pledge of intangible assets, whether at present or in the future. 

 

 “Company” means this Company and its subsidiaries and any one of these companies, as the case may be; 

 

 “HK$” means Hong Kong dollar; 

 

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

 

  

  

  

 

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

 

 “Purchaser’s Agent” means the party appointed by the Purchaser to hold shares in the Company in accordance with this Agreement; 

 

 “RMB” means renmibi, China’s legal tender; 

 

 “Sale Shares” means 100% of the Company’s equity to be sold by the Sellers to the Purchaser hereunder; 

 

 “Tax” means all the taxes arising or payable in China, including but not limited to income tax, interest tax, personal income tax, property tax, estate duty, stamp duty, sales tax, custom duty and tax relief deduction and rebate as provided by the law, and also includes relating tax penalties, fees and interest; 

 

 “US” means the United States of America; 

 

 “US$” means US dollar, the exchange rate of which is presumed for the purpose of this Agreement to be one US$ to 7.8 HK$. 

 

 

 2. Stock Transfer 

 

 2.1 In accordance with the terms and conditions of this Agreement, the Sellers as the beneficial owner of the Sale Shares shall sell, and the Purchaser shall in accordance with the covenants of this Agreement purchase the same and pay the consideration set out in this Agreement for the purchase of the Sale Shares free from pledge or mortgage or other encumbrances which shall include without limitation all rights to share dividends as may be declared or distributed on or after the date of this Agreement. 

 

 

 3. Conditions 

 

 3.1 The completion of the sale and purchase of shares hereunder shall be conditional upon: 

 

 (a) The Purchaser’s satisfaction with the completion and result of a comprehensive due diligence inspection of the Company (which shall cover without limitation the legal, financial and commercial aspects) and the Purchaser shall have the absolute discretion in deciding whether or not it is satisfied with the result of such inspection. 

 

  

  

  

 

 (b) The obtaining of the relevant Board Resolution and Shareholders’ Resolution of the Company to approve the terms of this Agreement and all matters and affairs relating to the transaction hereunder, as required. 

 

 (c) To obtain all necessary consent and approval as may be required under the laws and regulations governing stock trading in the United States of America (including all relevant consents and approvals of governmental and regulatory authorities) regarding the transaction hereunder for the consideration as agreed by the Purchaser. 

 

 (d) All the covenants and confirmation contained in this Agreement being truthful and free from misleading information from the date of this Agreement until the date of Completion. 

 

 (e) The Sale Shares be freely transferable to an independent third party without violation of the laws and regulations of the People’s Republic of China or its governmental policy. 

 

 3.2 The Sellers shall use its best endeavours to assist the Purchaser and such persons as the Purchaser may authorize for such purpose to complete the due diligence inspection and to allow them to enter into the premises of the Company and to peruse all the books, documents, contracts, records, tax forms, permits, correspondence and return forms and such other information of the Company as the Purchaser may reasonably require, so that it can conduct a comprehensive due diligence exercise (covering, but not limited to, the legal, financial and business aspects of the Company), and allow copies to be made of the relevant documents. The Company’s directors and staff should give the Purchaser all the required information and explanations. For the avoidance of doubt, the carrying out of due diligence inspection will not exonerate the Sellers from any obligation or liability towards the Purchaser nor limit the scope of such obligation or liability. 

 

 3.3 The Purchaser is entitled to waive any requirement under Clause 3.1 hereof. If, (a) any condition under Clause 3.1(a) has not been fulfilled (or otherwise waived by the Purchaser) before 3:00 p.m. on the Completion Date or on such postponed date for Completion as the Purchaser may agree or (b) the Purchaser is not satisfied with the result of the due diligence inspection according to Clause 3.2 hereof and notify the Sellers according in writing, then this Agreement shall become null and void and neither party shall have any further obligation or liability towards the other under this Agreement. 

 

  

  

  

 

 3.4 If any pre-condition to Completion has not been fulfilled on or before the Completion Date or has been rendered unfulfillable then the Sellers or the Company must upon its gaining knowledge of the situation forthwith inform the Purchaser in writing accordingly. Both parties hereby declare that notwithstanding the issue of the written notification mentioned above all the Sellers’ legal obligations under this Agreement will remain unchanged. 

 

 3.5 From the date of this Agreement until the Completion Date, save and except with the consent of the Purchaser, the Sellers covenant to procure that the Company will:- 

 

 keep the daily operation and maintenance of best practice 

 

 maintain its full operation; 

 

 accounts payable in a timely fashion; 

 

 maintain all records of the major operation the Sellers and the Company accurately. 

 

 comply with the government’s main demands, except where is reason to object to such demand and the consent of the Purchaser to raise such objection having been obtained; 

 

 pay up the payments which should be paid out of the turnover or profits, taxes and fees and government funds, except where there is sufficient reason for claiming that such sums are not payable and the prior consent of the Purchaser to object to such payment having been obtained; 

 

 fulfill all the provisions of contracts signed by the Sellers or the Company; 

 

 refrain from selling any of the Company’s assets and contractual rights without first obtaining the prior written consent of the Purchaser. 

 

 (b) The Sellers on the signing of this Agreement will covenant and confirm that they will not suffer or allow the Company to: 

 

 change its Articles of Association 

 

 wind-up voluntarily; 

 

 transfer its interest to a third-party; 

 

 declare or pay dividends to its Shareholders; 

 

  

  

  

 

 issue, re-purchase, sell or transfer or assume any liability for the issue, re-purchase, sell or transfer of any share in the Company; 

 

 create new class of shares or to sub-divide its shares or merge existing shares; 

 

 change any obligations contained in any signed contract and its contents, including the loan or mortgage contract 

 

 sell any assets and contractual rights of the company without first obtaining the written consent of the Purchaser. 

 

 3.6 The Sellers and the Company agree to give the Purchaser, the Purchaser’s Agent and its representative reasonable access to check and inspect the papers of the Company from now on until the Completion Date. The Sellers shall assist the accountant appointed by the Purchaser in order to conduct an audit of the Company’s accounts in accordance with the accounting principles and standard prevailing in Unit States of America. 

 

 3.7 The Sellers covenant with the Purchaser and confirms that there has not been a substantial depreciation of the capital assets of the Company, the business of the Company, on the prospects or financial position of the Company. 

 

 3.8 In the event of any breach of the Sellers’ covenants or the occurrence of any event prior to the date of this Agreement which would constitute a breach of such covenants and such breach of covenant cannot be fulfilled (in the case of covenants requirement the fulfillment of certain criterion) or rectified before Completion of the transaction hereunder, the Purchaser shall be entitled to terminate this Agreement and the transaction hereunder by written notice to the Sellers. 

 

 

 4. The prices of shares transfer 

 

 4.1 The price for the acquisition of the shares of the Company hereunder is HK$7,500,000.00. The Purchasers shall in accordance with Appendix 2 pay HK$500,000.00 as part of the price and pay the remaining balance of the price to be paid in kind on Completion Date, being 300,000.00 shares of Network CN Inc., the holding company of the Purchaser, which are listed on OTCBB stock market. The payment of the monetary portion of the price will be made in one installment on the third days respectively after the Completion Date and be paid into the account designated by the Sellers. Both parties to this Agreement agree to presume for the purpose of determining the quantity of shares to be given to the Sellers under this clause that the value of such shares of Network CN Inc. shall be equivalent to HK$7,000,000.00 (approximately US$2.99 per share of Network CN Inc.). 

 

  

  

  

 

 5. Completion 

 

 5.1 The transaction hereunder shall be completed at the office of Crown Winner International Limited, where address is 21/F., Chinachem Century Tower, 178 Gloucester Road, Wanchai, Hong Kong. 

 

 Transaction time shall be 3:00 p.m. on the Completion Date (or such other location and time as the parties may otherwise agree) and on such Completion the conditions contained in the Clause 5 and Clause 3.1 shall be fulfilled. 

 

 5.2 On Completion Date, the Sellers shall provide the following:- 

 

 (a) A set of documents to be certified by the directors of the Company or its legal representative, being the complete record of the shareholders’ resolution and board resolution of the Company approving the present transaction and the matters as stated in Clause 4.1 hereof. 

 

 (b) All legal documents such as minutes of meetings etc. (updated to the Completion Date):- 

 

 All return forms (concerning receipts and payments up to Completion Date); 

 

 All other documents and correspondences relating to the Company which have been retained or remained under the control and ownership of the Sellers. 

 

 Unless otherwise agreed by the Purchaser the items mentioned in Clause 5.2(b) shall be retained by the Company after Completion Date. 

 

 5.3 On Completion Date the Sellers shall convene a meeting of the shareholders of the Company at the request of the Purchaser in order to confirm their approval of the contents of this Agreement including the following:- 

 

 (i) To approve the sale of the Sale Shares; and 

 

  

  

  

 

 (ii) To modify the Articles of the Company as the Purchaser may require for the purpose of completing the purchase of the Sale Shares. 

 

 5.4 The following Clauses 6 to 16 (both inclusive) shall survive Completion of the transaction hereunder and remain in force thereafter. 

 

 

 6. The Structure of the company 

 

 6.1 On Completion of the transaction hereunder the business and operation of the Company shall be managed by the Board. 

 

 6.2 The Board shall have 3 members, the Purchaser or the Purchaser’s Agent shall have the right to nominate all 3 persons to the Board of the Company from time to time. 

 

 6.3 The quorum for Board meetings shall be 2 Directors, whether attending in person or by proxy. 

 

 6.4 Board meetings shall be held at least once in every half year, unless otherwise agreed by all the Directors. 

 

 

 7. Exclusivity 

 

 7.1 The Sellers have negotiated exclusively and in good faith with the Purchaser regarding the transaction under this Agreement and the details thereof and the Sellers agree that it will not seek another purchaser for the same after the signing of this Agreement. If the Sellers unilaterally and without good cause enter into negotiation with another prospective purchaser for the sale of the shares of the Company without first obtaining the consent in writing of the Purchaser then the Sellers must compensate the Purchaser with the payment of a reasonable sum so as to compensate the Purchaser for the time, cost and effort spent in the negotiation of this transaction. 

 

 

 8. Commitments 

 

 8.1 The Sellers and the Company jointly covenant with the Purchaser (to the intent that such covenant will be binding whether or not the transaction has been completed):- 

 

 (a) These covenants are truthful and accurate in every respect, up to and including the Completion Date. 

 

  

  

  

 

 (b) Both the Sellers and the Company have the requisite legal capacity and authority to enter into and perform those provisions this Agreement with binding effect on them. 

 

 (c) The Sale Shares represent 100% of the equity (having taken into account all diluting effect, if any). 

 

 (d) The shares of the Company are not subject to any share option or pledge or debenture or similar instrument issued in favour of a third party which entitles such third party to claim against the Company regarding the same. 

 

 (e) There is and will be no Pledge or Mortgage of the shares to affect the sale of the shares hereunder whether at present, on Completion Date or in the future. 

 

 (f) The Sellers have the right to sell the Sale Shares according to the Agreement in a legally binding and complete manner without the need to obtain the consent of a third party. 

 

 (g) The data in Appendix 1 and 2 are accurate and truthful in all respects. 

 

 8.2 At any time prior to the Completion of the transaction, if any of the following events occur:- 

 

 (a) Any violation of the Sellers’ covenants and confirmation mentioned above; 

 

 (b) The presence of any misrepresentation or misleading element in the above mentioned covenants; 

 

 (c) And such event would have affected the willingness of a reasonable purchaser to pay for such purchase, then the Sellers shall immediately inform the Purchaser in writing and the Purchaser shall be entitled to rescind this Agreement within 7 days of its receipt of such notice (inclusive of the date of receipt). 

 

 8.3 At any time prior to the Completion of the transaction, if the Purchaser discovers that any of the above mentioned covenants is false or has not been or cannot be fulfilled or remedied then the Purchaser shall also be entitled to terminate the transaction hereunder by notice in writing to the Sellers. 

 

  

  

  

 

 9. Warrantee of the Sellers 

 

 9.1 The Sellers covenant with the Purchaser that before Completion the Sellers shall not suffer the Company, save and except with the prior written covenant of the Purchaser:- 

 

 (a) to incur any significant capital expenditure or grant any option for the purchase of any capital asset. 

 

 (b) to sell or agree to sell or grant any option regarding the sale of the Company’s asset. 

 

 (c) to borrow or incur expenditure which is out of the ordinary. 

 

 (d) to sign contract or assume any obligation which is abnormal or outside the scope of the main business of the Company. 

 

 (e) to lend money to others or make any assignment of debt. 

 

 (f) to be involved in or carry on the business of or finance any leasing arranging or make any promise to accept deferred performance by others. 

 

 (g) to declare or pay any dividend or do anything that would result in a financial situation of the Company which is worse than that prevailing on the signing of this Agreement. 

 

 (h) to give Pledge or Mortgages or guarantee or agree to give guarantees or debenture or remedy. 

 

 (i) to vary the terms of the contracts with its employees / directors, employ new employees or terminate the employment of existing employees except in the ordinary course of business. 

 

 (j) to issue or agree to issue any new share or any kind of loan. 

 

 (k) to engage in any abnormal business or business outside the scope of the main business of the Company. 

 

 (l) to assume obligations on voluntary basis or fail to perform significant obligation, whether or not such obligations are requirements of law. 

 

 (m) to do anything that will cause the financial situation of the Company to become worse than its situation on the date of this Agreement. 

 

  

  

  

 

 9.2 The Sellers agree to completely waive the liability of the Company or the Purchaser or the Purchaser’s Agent regarding any loss or depreciation in the value of the Company (including the net asset value and any projected profits), obligations and expenses (including legal fees) that is occasioned by any failure which happened before the Completion Date on the part of the Sellers to give information regarding the Company. 

 

 9.3 The Sellers also guarantee to the Purchaser that before Completion of the transaction hereunder the Company will not enter into any agreement or contract involving its significant interest or having any profound effect on its business without first obtaining the consent in writing of the Purchaser. 

 

 9.4      Each of the Sellers hereby represents warrants and covenants that the information in Appendix 3 is accurate and truthful in all respects. 

 

 

 10. Information acquire 

 

 10.1 The Sellers shall assist the Purchaser, the Purchaser’s Agent and the Purchaser’s professional consultant in a timely fashion upon request to arrange for the visit of the Company’s premises and to assist in their obtaining of all relevant information regarding the business, asset, indebtedness and contracts of the Company and the proof of ownership of assets of the Company. 

 

 

 11. Miscellaneous 

 

 11.1 The Sellers shall take all necessary action including the procurement of other parties’ action as required by the Purchaser and the giving of covenants and signing of papers by such other party in order to assist the Purchaser in its acquisition of the relevant shareholding in the Company and in its registration of the same. 

 

 11.2 In so far as it is allowed under the law in Hong Kong and consented to by the Sellers the Purchaser may appoint an individual Chinese citizen or a corporate entity in the People’s Republic of China to hold the Sale Shares on its behalf. 

 

 

 12. Confidentiality 

 

 12.1 Each party hereto hereby covenants with the other party that it will not disclose or communicate any information relating to the business, financial or contractual aspects of the other party to a third party on or after the date of this Agreement and that such information will be kept strictly confidential and may only be released to its professional consultant or as required by law or regulatory authorities or to its employee on “need to know” basis and shall use its best endeavours to prevent the publication or disclosure of such confidential information. 

 

  

  

  

 

 12.2 Except in the event of an agreement of both parties or in complying with the requirement of law or regulatory authorities the facts and matters of this Agreement may not be disclosed in any form or manner. If either party is required by law or by a regulatory authority to make any public disclosure it must first consult the other party as circumstances may reasonably allow. 

 

 

 13. Overall of the agreement 

 

 13.1 This Agreement contains all the items agreed and supersedes all previous contracts, agreements, arrangements, statements, memoranda or other transactions relating to the matter herein, such contracts, agreements, arrangements, statements that were before this Agreement shall be terminated immediately, the parties hereto realize that they can not pursue any liability arising from any agreement which has been so terminated. 

 

 13.2 Any alteration of this Agreement or any alteration based on this Agreement must be in writing and signed and consented to by both parties and will otherwise be null and void. 

 

 13.3 Any provision of this Agreement which has not been fulfilled when the transaction hereunder is completed shall nevertheless remain effective whether or not the transaction has been completed. 

 

 13.4 This Agreement shall be binding on the successors to the parties but the obligations hereunder cannot be delegated to another party. 

 

 13.5 In the event that any provision of this Agreement is unenforceable for illegality or otherwise the remaining provisions shall remain unaffected. 

 

 

 14. Time 

 

 14.1 Time is of the essence in this Agreement, all changes to this Agreement require the consent of both parties. 

 

 14.2 Time is an essence in this Agreement, however, any party who failed to exercise its right in accordance with this Agreement or delayed in the exercise of such right shall not be regarded as having waived or relinquished such right and any individual act in the exercise of or partial exercise of any of its rights (including rights under any settlement agreement with the selling party) shall not preclude or affect its exercise of any or any further rights or affect its right to enforce its right against any other party either jointly or severally, in accordance with this Agreement. The rights and remedies under this Agreement are cumulative and in addition to the rights and remedies available under the law. 

 

  

  

  

 

 15. Notice 

 

 15.1 All notices, claims, proceedings, documents and other communications under this Agreement (called “Communications” in this Clause 15) shall be written in Chinese or English, and shall be send to the last notified address by the ways as stated below, and the recipient shall be deemed to have received the Communication on the date as shown on the right-hand-side column. 

	
 Ways of sending notice 

	
 Deemed to receive within: 

	
 Local mail or post 

	
 24 hours 

	
 Facsimile 

	
 When the proper answer-back is recived 

	
 Express air mail or Express International post 

	
 3 days 

	
 Air mail 

	
 5 days 

 If such delivery is at 6:00 p.m. of any business day by in personal or fax, or that day is not a business day, the delivery will be deemed to be received at 9:30 a.m. of the next business day. 

 

 15.2 According to Clause 15.1 delivery of notice, it shall be deemed to be delivered successfully, if the address or facsimile number is unambiguous. 

 

 15.3 In accordance with the law, Communication is not limited to the ways as shown in this Clause 15. 

 

 

 16. Fees and Stamp Tax 

 

 16.1 The Purchaser and the Sellers shall be responsible for their respective costs and expenses incurred in the preparation, negotiation, execution and performance of this Agreement (including legal fees). 

 

  

  

  

 

 16.2 The Purchaser and the Sellers shall bear the stamp duty, administrative expenses and any other fees (if any) incidental to the sale and purchase hereunder in equal shares. 

 

 

 17. Governing Law 

 

 17.1 This Agreement and all legal rights and obligations arising from it shall be interpreted and enforced in accordance with the law of Hong Kong Special Administrative Region. In the event of any dispute arising from this Agreement, such dispute shall be resolved by the courts of law in Hong Kong. 

 

 17.2 If both parties agree to that effect in writing any dispute, controversy or claim arising out of or in relation to this Agreement may be resolved through arbitration in accordance with the UNCITRAL Rules to be conducted at HKIAC. 

 

 17.3 Arbitration shall be held at the Hong Kong International Arbitration Centre, and shall be handled by one arbitrator in accordance with the appropriate Rules of the Hong Kong International Arbitration Center (including UNCITRAL arbitration rules). 

 

 17.4 Arbitration shall be conducted in English or Chinese. 

 

 

 18. Announcement 

 

 18.1 Each party to this Agreement confirms and acknowledges that before the signing of this Agreement it has obtained legal advice relating to the Agreement and its contents and that it understands the contents of this Agreement. 

 

 

 19. Agreement 

 

 19.1 All duplicate copies of this Agreement have equal authority and are regarded as the same document. For the avoidance of doubt, this Agreement will not be binding on any person other than those who has by conduct confirmed its position as a party to this Agreement. 

 

 

 20 Material Non-Public Information 

 

 20.1 Sellers and Company hereby acknowledge that they are aware, and further agree that they will advise its principals, officers, directors, agents and representatives (collectively, “Agents”), that US Federal and State securities laws prohibit any person who has material, non-public information about a company from purchasing or selling securities of such a company or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities and it agrees that they or their Agents will not purchase or sell such securities under such circumstances. 

 

  

  

  

 

 21. Publicity 

 

 21.1 No public release or announcement concerning the transactions contemplated hereby shall be issued by the Company or the Sellers without the prior consent of the Purchaser 

 

 IN WITNESS WHEREOF this Agreement is executed by the parties hereto on the day and year first above written 

 

 

	
 Seller: 

	
 Zhang Lina (CHINESE OMITTED) 

	    	    
	   	   
	
 Signature: /s/ 

	    
	
 Date: 

	
 January 24, 2007 

	    	    
	   	   
	
 Seller: 

	
 Zhang Qinxiu (CHINESE OMITTED) 

	    	    
	   	   
	
 Signature: /s/ 

	    
	
 Date: 

	
 January 24, 2007 

	    	    
	
 Purchaser: 

	
 Crown Winner International Limited 

	    	    
	   	   
	
 Signature: /s/ 

	    
	
 Name: 

	
 Godfrey Hui 

	
 Position: 

	
 Director 

	
 Date: 

	
 January 24, 2007 

	    	    
	    	    
	
 Witness: 

	    
	    	    
	   	   
	
 Signature: /s/ 

	    
	
 Name: 

	    
	
 Date: 

	    

 

  

  

  

 

  Appendix 1: 

	
 Particulars of the Company 

	    
	    	    
	
 1. Date of incorporation: 

	
 7-Mar-97 

	    	    
	
 2. Place of incorporation: 

	
 The People’s Republic of China 

	    	    
	
 3. Registered name: 

	
 Shanghai Quo Advertising Company Limited 

	
 (CHINESE OMITTED) 

	    	    
	
 4. Registration number: 

	
 3101082020423 

	    	    
	
 5. Business license number: 

	
 08000003200605260021 

	    	    
	
 6. Registered address: 

	
 Room 328, Block 2, 555 Qingyun Road, 

	
 Shanghai, China 

	
 (CHINESE OMITTED) 

	    	    
	
 7. Registered capital: 

	
 RMB3,000,000.00 

	    	    
	
 8. Nature: 

	
 Limited Liability Company 

	    	    
	
 9. Legal representative: 

	
 Zhang Lina (CHINESE OMITTED) 

	    	    
	
 10. Business scope: 

	
 Design, Production, Advertising Agency, Sales 

  

  

  

 

 Appendix 2: 

 

 Sellers 

 

	
 Name 

	
 Registered 

 Capital 

	
 The 

 Percentage of  

 Equity  

 Stockholding 

 held by the 

 Sellers on the 

 Date of 

 Agreement 

	
 The Equity  

 Stockholding  

 Percentage  

 represented by 

 the Sale 

 Shares 

	
 Consideration 

 for the sale of 

 the Sale 

 Shares 

	
 Zhang Lina 

 (CHINESE OMITTED) 

	
 RMB 

 2,700,000.00 

	
 90 per cent 

	
 90 per cent 

	
 HK$ 

 6,750,000.00 

	
 Zhang Qinxiu 

 (CHINESE OMITTED) 

	
 RMB 

 300,000.00 

	
 10 per cent 

	
 10 per cent 

	
 HK$ 

 750,000.00 

 

 (1) The Purchaser shall pay total HK$500,000.00 into the following bank account within 3 days after the Completion Date: 

 

	    	
 Assigned Person: 

	
 Lee Ka Ho (CHINESE OMITTED) 

	    	
 Account name: 

	
 Lee Ka Ho (CHINESE OMITTED) 

	    	
 Name of the Bank: 

	
 Citic Kawah Bank Shanghai Branch (Swift: KWHKCNSH) 

	    	
 Account Number: 

	
 HK$ Account No: 8180-12986608021013 

	    	
 Amount: 

	
 HK$500,000.00 

 

 (2) Within 20 days after the Completion Date (inclusive of the date of signing), the Purchaser shall transfer 300,000.00 ordinary shares of NWCN to the Sellers to settle the balance of HK$7,000.000.00. 

 

  

  

  

 

 Appendix 3: 

 

 

 Each of the Sellers hereby represents and warrants to and covenants with NWCN (which representations, warranties and covenants shall survive the Closing of this Agreement) that: 

 

	
 1.1 

	
 Binding Obligation.   This Agreement, when executed and delivered by the Seller, shall constitute a valid and binding obligation of the Seller, enforceable in accordance with its terms. The entering into of this Agreement and the transactions contemplated hereby do not result in the violation of any of the terms and provisions of any law applicable to the Seller or of any agreement, written or oral, to which the Seller may be a party or by which the Seller is or may be bound. The sale of the Share to the Seller as contemplated in this Agreement complies with or is exempt from the applicable securities legislation of the jurisdiction of residence of the Seller. 

 

	
 1.2 

	
 No Registration.   The Seller acknowledges and agrees that the Sale Shares will be offered and sold to the Seller without such offer and sale being registered under the Securities Act, or under any state securities or “blue sky” laws of any state of the US, and will be issued to the Seller in an offshore transaction outside of the United States in accordance with a safe harbour from the registration requirements of the Securities Act provided by Regulation S. As such, the Seller further acknowledges and agrees that the Sale Shares will, upon issuance, be “restricted securities” within the meaning of the Securities Act. The Seller understands that the Sale Shares may not be offered or sold in the US or, directly or indirectly, to US Persons, as that term is defined in Regulation S, except in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in each case in accordance with applicable state and federal securities laws. Neither the SEC nor any other securities commission or similar regulatory authority has reviewed or passed on the merits of the Sale Shares. The statutory and regulatory basis for the exemption claimed for the offer of the Sale Shares, although in technical compliance with Regulation S, would not be available if the offering is part of a plan or scheme to evade the registration provisions of the Securities Act or any applicable state and federal securities laws. 

 

	
 1.3 

	
 Seller Not a US Person.   The Seller is not a US Person (as defined in Regulation S under the Securities Act). The Seller is not acquiring the Sale Shares for the account or benefit of, directly or indirectly, any US Person. 

 

  

  

  

 

	
 1.4 

	
 Purchase Entirely for Own Account.   The Seller understands that NWCN is making this Agreement with the Seller in reliance upon the Seller’s representation to NWCN, which by the Seller’s execution of this Agreement the Seller hereby confirms, that the Seller is outside the United States when receiving and executing this Agreement and is acquiring the Sale Shares as principal for the Seller’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Seller has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, the Seller further represents that the Seller does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Sale Shares. 

 

	
 1.5 

	
 No Underwriter.   The Seller is not an underwriter of, or dealer in, the common shares of NWCN, nor is the Seller participating, pursuant to a contractual agreement or otherwise, in the distribution of the Sale Shares. 

 

	
 1.6 

	
 Investment Experience.   The Seller acknowledges that it is able to fend for itself, can bear the economic risk of its investment and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Sale Shares and has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment. 

 

	
 1.7 

	
 No Directed Selling Efforts.   The Seller acknowledges that the Seller has not acquired the Sale Shares as a result of, and will not itself engage in, any “directed selling efforts” (as defined in Regulation S under the Securities Act) in the US in respect of the Sale Shares which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the US for the resale of the Sale Shares; provided, however, that the Seller may sell or otherwise dispose of the Sale Shares pursuant to registration of the Sale Shares pursuant to the Securities Act and any applicable state and federal securities laws or under an exemption from such registration requirements and as otherwise provided herein. 

 

	
 1.8 

	
 No General Solicitation.   The Seller is not aware of any advertisement of any of the Sale Shares and is not acquiring the Sale Shares as a result of any form of general solicitation or general advertising including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising. 

 

  

  

  

 

	
 1.9 

	
 Disclosure of Information.   The decision to execute this Agreement and acquire the Sale Shares hereunder has not been based upon any oral or written representation as to fact or otherwise made by or on behalf of NWCN, and such decision is based entirely upon a review of information (the receipt of which is hereby acknowledged) which has been filed by NWCN with the Securities and Exchange Commission (the “SEC”). The Seller and the Seller’s advisor(s) have had a reasonable opportunity to ask questions of and receive answers from NWCN in connection with the distribution of the Sale Shares hereunder, and to obtain additional information, to the extent possessed or obtainable without unreasonable effort or expense, necessary to verify the accuracy of the information about NWCN. The Seller acknowledges that it has had access to all the information it considers necessary or appropriate for deciding whether to purchase the Sale Shares. The Seller acknowledges that NWCN is (1) concurrently negotiating with other prospective investors for the purchase and sale of additional shares of Common Stock and (2) preparing an Employee Compensation Plan pursuant to which NWCN may issue additional shares of Common Stock. 

 

	
 1.10 

	
 US Civil Remedies.   The Seller is acquiring the Sale Shares pursuant to an exemption from the registration and prospectus requirements of applicable securities legislation in all jurisdictions relevant to this subscription, and, as a consequence, the Seller will not be entitled to use most of the civil remedies available under applicable securities legislation and the Seller will not receive information that would otherwise be required to be provided to the Seller pursuant to applicable securities legislation. 

 

	
 1.11 

	
 No Other Representations.   No person has made to the Seller any written or oral representations: 

 

	
    

	
 1.11.1 

	
 that any person will resell or repurchase any of the Sale Shares; 

 

	
    

	
 1.11.2 

	
 that any person will refund the purchase price of any of the Sale Shares; 

 

	
    

	
 1.11.3 

	
 as to the future price or value of any of the Sale Shares; or 

 

	
    

	
 1.11.4 

	
 that any of the Sale Shares will be listed and posted for trading on any stock exchange or automated dealer quotation system or that application has been made to list and post any of the Sale Shares of NWCN on any stock exchange or automated dealer quotation system. 

 

  

  

  

 

	
    

	
 1.11.5 

	
 No Registration Rights.   Except as provided in this Agreement, the Seller acknowledges that NWCN has not undertaken, and will have no obligation, to register any of the Sale Shares under the Securities Act. 

 

	
 1.12 

	
 Indemnification.   The Seller will indemnify and hold harmless NWCN and, where applicable, its directors, officers, employees, agents, advisors and shareholders, from and against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon any representation or warranty of the Seller contained herein or in any document furnished by the Seller to NWCN in connection herewith being untrue in any material respect or any breach or failure by the Seller to comply with any covenant or agreement made by the Seller to NWCN in connection therewith. 

 

	
 1.13 

	
 OTC Bulletin Board.   None of the Sale Shares are listed on any stock exchange or automated dealer quotation system and no representation has been made to the Seller that any of the Sale Shares will become listed on any stock exchange or automated dealer quotation system, except that currently market makers make a market for NWCN’s common shares on the NASD’s OTC Bulletin Board. 

 

	
 1.14 

	
 Seller’s Advisors.   The Seller has been advised to consult the Seller’s own legal, tax and other advisors with respect to the merits and risks of an investment in the Sale Shares and with respect to applicable resale restrictions, and it is solely responsible (and NWCN is not in any way responsible) for compliance with: 

 

	
    

	
 1.14.1 

	
 any applicable laws of the jurisdiction in which the Seller is resident in connection with the distribution of the Units hereunder, and 

 

	
    

	
 1.14.2 

	
 applicable resale restrictions; and 

 

	
    

	
 1.14.3 

	
 this Agreement is not enforceable by the Seller unless it has been accepted by NWCN, and the Seller acknowledges and agrees that NWCN reserves the right to reject any subscription for any reason. 

 

  

  

  

 

	
 1.15 

	
 Legends.   The Seller acknowledges and agrees that all certificates representing the Sale Shares will be endorsed with the following legend, or such similar legend as deemed advisable by legal counsel for the Purchaser, to ensure compliance with Regulation S and to reflect the status of the Sale Shares as restricted securities: 

 

	
    

	
 1.15.1 

	
 THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.” 

 

	
    

	
 1.15.2 

	
 Any legend required by the laws of any State, including any legend required by the California Department of Corporations and Sections 417 and 418 of the California Corporations Code. 

 

	
 1.16 

	
 Prohibited Transactions.   During the last thirty (30) days prior to the date hereof, neither Seller nor any Affiliate of Seller which (x) had knowledge of the transactions contemplated hereby, (y) has or shares discretion relating to Seller’s investments or trading or information concerning Seller’s investments, including in respect of the Sale Shares, or (z) is subject to Seller’s review or input concerning such Affiliate’s investments or trading (collectively, “Trading Affiliates”) has, directly or indirectly, effected or agreed to effect any short sale, whether or not against the box, established any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act) with respect to the Common Stock, granted any other right (including, without limitation, any put or call option) with respect to the Common Stock or with respect to any security that includes, relates to or derived any significant part of its value from the Common Stock or otherwise sought to hedge its position in the Sale Shares or sold any Common Stock (each, a “Prohibited Transaction”). At no time prior to the termination of this Agreement, shall Seller or its Trading Affiliates engage, directly or indirectly, in a Prohibited Transaction.ex10_26.htm

 Exhibit 10.26 

  

 Hui Zhong Lian He Media Technology Co., Ltd. 

 

 (汇众联合传媒科技有限公司) 

 

 Beijing Hui Zhong Bo Na Media Advertising Co., Ltd. 

 

 (北京汇众博纳传媒广告有限公司) 

 

 AND 

 

 Dayong Hao 

 

 (郝大勇) 

 

 Kaiyin Liu 

 

 (刘凯音) 

 

 

 

 EXCLUSIVE MANAGEMENT CONSULTING  

 SERVICES AGREEMENT 

 

 

 

 January 1, 2008 

 

 Beijing, the People’s Republic of China 

 

    

 

    

 

 EXCLUSIVE MANAGEMENT CONSULTING SERVICES AGREEMENT 

 

 This EXCLUSIVE MANAGEMENT CONSULTING SERVICES AGREEMENT (“Agreement”) is entered into as of January 1, 2008 (“Effective Date”), by and among the following (each a “Party” and together the “Parties”): 

 

	
    

	
 (i) 

	
 Hui Zhong Lian He Media Technology Co., Ltd. (汇众联合传媒科技有限公司), a limited liability company existing under the laws of the People’s Republic of China (“Lianhe”), with its registered office at Room 6309, No. 57 Beisanhuanzhong Road, Haidian District, Beijing People’s Republic of China (中国北京市海淀区北三环中路57号远望楼6309室); 

 

	
    

	
 (ii) 

	
 Beijing Hui Zhong Bo Na Media Advertising Co., Ltd. (北京汇众博纳传媒广告有限公司), a limited liability company existing under the laws of the Peoples’ Republic of China (“Bona”), with its registered office at Room 701, Building One, No.2 Deshengmenwaidajie Avenue, Xicheng District, Beijing, People’s Republic of China (中国北京西城区德胜门外大街2号1楼701室); 

 

	
    

	
 (iii) 

	
 Dayong Hao (郝大勇) and Kaiyin Liu (刘凯音), each a citizen of the People’s Republic of China, for purposes of Section 4, 5, 6, 7, 9, 11 and 12 only. 

 

 Capitalized terms not otherwise defined have the meanings assigned to them in Appendix A to this Agreement, which is incorporated and made a part hereof by reference. 

 

 RECITALS 

 

 This Agreement is entered into with reference to the following facts: 

 

	
 A. 

	
 Lianhe is a PRC limited liability company duly established and existing under the laws of the Peoples’ Republic of China (“PRC” or “China”). 

 

	
 B. 

	
 Bona is a PRC limited liability company owned by Dayong Hao (郝大勇), and Kaiyin Liu (刘凯音), each a citizen of the PRC (together, “Shareholders”). The business in which Bona is now and may in the future become involved is referred to as the “Business.” 

 

 NOW, THEREFORE, in consideration for the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the Parties, and through friendly consultation, under the principle of equality and mutual benefits, in accordance with the relevant laws and regulations of the China, the Parties agree as follows: 

 

    

 - 1 - 

    

	 1. 	 Exclusive Management Services 

 

	 During the Term of this Agreement, Lianhe will act as the exclusive management service provider to Bona, and Bona engages Lianhe for that purpose.  Bona agrees it will not accept the same or similar services from any other Person during the Term of this Agreement.  The scope of the services to be provided by Lianhe include identifying and providing to Bona executive and financial management personnel in sufficient numbers and with expertise and experience appropriate to provide the services identified in Appendix B (“Management Services”), under the supervision and authority of the shareholders’ meeting and/or board of directors of Bona acting in accordance with the terms of this Agreement. 

	
 2.  

	 Fee for Services 

            

	
 (a) 

	
 In consideration for providing the Management Services, Lianhe will be entitled to receive a service fee from Bona during the Term of this Agreement without giving effect to the payment under the other Business Cooperation Agreements between Lianhe and Bona.  The fee for services shall be 26% of the Sales Revenue (excluding Taxes) of Bona of the applicable year.  Lianhe and Bona can consult with each other from time to time to adjust the percentage of the Sales Revenue (excluding Taxes) of Bona which Lianhe charges under this Agreement based on the cooperation between the Parties and Bona’s operation status. 

 

	   	 Lianhe and Bona can consult with each other to determine if the fee for services shall be paid monthly, quarterly, or annually based on Bona’s operation status.  The fee for services shall be paid within 30 days after the completion of the applicable charging period.  Any dispute between the Parties concerning any calculation or payment under this Section 2 will be resolved pursuant to the dispute resolution provisions of Section 10. 

 

	
 (b) 

	
 By the Equity Pledge Agreement between and among Lianhe, the Shareholders and Bona dated as of January 1, 2008, the Shareholders have pledged the equity interests held by them in the registered capital of Bona to secure Bona’s payment of the service fee in accordance with this Agreement. 

 

	 3.  	 Interest Penalty 

	 If any amounts due and payable under this Agreement are not paid when due, penalty interest will accumulate on such amounts at the rate of twenty-five percent (25%) per annum until paid. This interest penalty may be reduced or waived by Lianhe in light of actual circumstances, including the reason for any delay in payment. 

 

	 4. 	 Operation of Business 

	 During the Term of this Agreement: 

 

	 (a)  	 The Parties ensure that: 

    

 2 

    

 

	
    

	
 (i) 

	
 the business of Bona, together with all business opportunities presented to or which become available to Bona, will be treated as part of the Business covered by the Management Services and this Agreement; 

 

	
    

	
 (ii) 

	
 all cash of Bona will be maintained in Company Bank Accounts or disposed of in accordance with this Agreement; 

 

	
    

	
 (iii) 

	
 all business income, working capital, recovered accounts receivable, and any other funds which come into the possession of Bona or are derived from or related to the operation of the business of Bona, are deposited into a Company Bank Account; 

 

	
    

	
 (iv) 

	
 all accounts payable, employee compensation and other employment-related expenses, and any payments in connection with the acquisition of any assets for the benefit of Bona or the satisfaction of any liabilities of Bona, are paid from amounts maintained in Company Bank Accounts; and 

 

	
    

	
 (v) 

	
 no action is taken without the prior written consent of Lianhe that that would have the effect of entrusting all or any part of the business of Bona to any other Person. 

 

	
 (b) 

	
 Lianhe ensures that: 

 

	
    

	
 (i) 

	
 it advises Bona with respect to the conduct of the Business the same level of care it exercises with respect to the operation of its own business and will at all times act in accordance with its Reasonable Business Judgment, including taking no action which it knows, or in the exercise of its Reasonable Business Judgment should have known, would materially adversely affect the status of any of permits, licenses and approvals necessary for the conduct of the Business or constitute a violation of applicable PRC laws and regulations; and 

 

	
    

	
 (ii) 

	
 subject to the provisions of Section 7 with respect to the Transition, it will preserve intact the business and operations of Bona and take no action which it knows, or in the exercise of its Reasonable Business Judgment should have known, would materially adversely affect the business, operations, or prospects of Bona. 

 

	 (c) 	 The Shareholders ensure that: 

	
    

	
 (i) 

	
 none of them takes any and all portion of the Net Profit for a certain year they are entitled to as a shareholder of Bona unless Lianhe has been fully paid for the Management Services for the applicable year; 

 

	
    

	
 (ii) 

	
 none of them, nor any of their agents or representatives, takes any action that interferes with, or has the effect of interfering with, the operation of the Business in accordance with this Agreement, or which materially adversely affects the assets, operations, business or prospects of Bona; 

 

    

 3 

    

	
    

	
 (iii) 

	
 they will appoint the candidate proposed by Lianhe according to the Management Services as the directors of Bona; 

 

	
    

	
 (iv) 

	
 they will use their Best Efforts to cooperate and assist Lianhe and Bona to maintain in effect all permits, licenses and other authorizations and approvals necessary or appropriate to the conduct of the business of Bona; and 

 

	
    

	
 (v) 

	
 they will use their Best Efforts to assist Lianhe and Bona to maintain positive and productive relations with relevant Governmental Authorities and their representatives. 

 

	
    

	 (d)  	 Bona ensures that it will: 

 

	
    

	
 (i) 

	
 pay Lianhe the fee for services according to Section 2 of this Agreement; 

 

	
    

	
 (ii) 

	
 make available to Lianhe, for its performance of this Agreement, any kind of operational and financial information (including but not limited to Bona’s monthly, quarterly, annually financial statements, budget plans and business plans), and upon Lianhe’s responsible request, give detailed description of a certain matter; 

 

	
    

	
 (iii) 

	
 provide assistance to Lianhe and personnel authorized by Lianhe, for its performance of this Agreement, to enter into the working place and other operational sites of Bona; 

 

	
    

	
 (iv) 

	
 notify and obtain written consent of Lianhe prior to the execution of any material agreement with a third party.  For purpose of this section, a material agreement include any agreement, convent, undertaking or commitment with a third party, written or verbally, relating cooperation, transfer of equity interest, financing or other matters that could possibly affect Lianhe’s interest in this Agreement, or any other agreement, convent, undertaking or commitment with a third party, written or verbally, that could reasonably cause Lianhe change or terminate this Agreement; 

 

	
    

	
 (v) 

	
 promptly notify Lianhe of any litigation or arbitration proceeding that could reasonably affect Bona whether Bona is a party or not, and any administrative discipline Bona maybe or has received; 

 

	
    

	
 (vi) 

	
 promptly notify Lianhe of any other event that could or has affected the normal operation of Bona; 

 

    

 4 

    

 

	
    

	
 (vii) 

	
 upon Lianhe’s reasonable request, obtain from competent Government Authority any and all approval, permit, consent or authorization necessary for Lianhe’s performance of this Agreement ; 

 

	
    

	
 (viii) 

	
 report to Lianhe any and all correspondence with Government Authority, including photocopies of any and all approval, permit, consent or authorization obtained therefrom ; 

 

	
    

	
 (ix) 

	
 maintain using its best efforts any and all approval, permit, license and authorization necessary for the continued operation of Bona; 

 

	
    

	
 (x) 

	
 assure warranties and representation in Section 9 of this Agreement shall remain effective and accurate during the Term of this Agreement; and 

 

	
    

	
 (xi) 

	
 appoint the candidate proposed by Lianhe according to the Management Services as the senior executives of Bona (including but not limited to general manager, chief financial officer). 

 

 

 5.             Material Actions 

 

 The Parties acknowledge and agree that the economic risk of the operation of the Business is being substantially assumed by Lianhe and that the continued business success of Bona is necessary to permit the Parties to realize the benefits of this Agreement and the other Business Cooperation Agreements. During the Term of this Agreement, the Parties therefore ensure that Bona and the Shareholders will not take any Material Action (as defined in Appendix C) without the advance written consent of Lianhe, which consent will not be unreasonably withheld or delayed. 

 

 6.             Right of First Refusal 

 

 If any of the Shareholders (“Selling Shareholder”) proposes to transfer to any other Person other than another Shareholder (“Proposed Transferee”) all or any portion of the equity of Bona held by that Shareholder, the Selling Shareholder will first deliver to Lianhe a written notice (“Notice”) offering to Lianhe or its designee(s) all of the equity proposed to be transferred by the Selling Shareholder, on terms and conditions no less favorable to Lianhe than those offered to the Proposed Transferee. The Notice will include all relevant terms of the Proposed Transfer, and will be irrevocable for a period of thirty (30) calendar days after its receipt by Lianhe. Lianhe will have the right and option, by written notice delivered within thirty (30) calendar days after receipt of the Notice, to notify the Selling Shareholder in writing of its acceptance of all or any part of the equity so offered in the Notice, at the purchase price and on the terms stated in the Notice. If Lianhe so accepts the offer contained in the Notice, then the equity of Bona proposed to be transferred will be transferred to Lianhe at the purchase price and on the terms stated in the Notice. For purpose of this section, the non-selling Shareholder hereby waives his right of first refusal which shall nevertheless be available to the non-selling Shareholder under PRC Law or organizational documents of Bona. 

 

    

 5 

    

 

 7.             Transition of Business to Lianhe 

 

 The Parties agree that, at the sole discretion of Lianhe, during the Term of this Agreement, Lianhe may purchase from Bona and Bona will sell to Lianhe or any other Affiliates designated by Lianhe (“Transferee”) any part or all of the business, personnel, assets and operations of Bona which may be lawfully conducted, employed, owned or operated by Lianhe (“Transition”), including any of the following: 

 

	
    

	
 (a) 

	
 business opportunities presented to, or available to Bona may be pursued and contracted for in the name of the Transferee rather than Bona, and at its discretion the Transferee may employ the resources of Bona to secure such opportunities; 

 

	
    

	
 (b) 

	
 any tangible or intangible property of Bona, any contractual rights, any personnel, and any other items or things of value held by Bona may be transferred to the Transferee at book value; 

 

	
    

	
 (c) 

	
 real property, personal or intangible property, personnel, services, equipment, supplies  and any other items useful for the conduct of the Business may be obtained by the Transferee by acquisition, lease, license or otherwise, and made available to Bona on terms to be determined by agreement between the Transferee and Bona; and 

 

	
    

	
 (d) 

	
 contracts entered into in the name of Bona may be transferred to the Transferee, or the work under such contracts may be subcontracted, in whole or in part, to the Transferee, on terms to be determined by agreement between the Transferee and Bona; 

 

 provided, however, that none of the foregoing, and no other part of the Transition may cause or have the effect of terminating (without being substantially replaced under the name of the Transferee) or adversely affecting any license, permit or regulatory status of Bona. 

 

 Bona and the Shareholders hereby agree that they will take necessary actions to ensure the successful completion of the Transition if Lianhe determines to undertake the Transition. 

 

 8.             Ownership of Intellectual Property 

 

 All Intellectual Property created by Lianhe in the course of providing the Management Services will be the sole property of Lianhe, and Bona will have no right to any ownership or use of such Intellectual Property except under separate written agreement with Lianhe. 

 

 9.             Representations and Warranties of Bona and Shareholders 

 

 Bona and the Shareholders hereby make the following representations and warranties for the benefit of Lianhe: 

 

    

 6 

    

 

 

	
    

	
 (a) 

	

 Corporate Existence and Power Bona is a limited liability company duly organized and validly existing under the laws of the PRC, and has all corporate powers and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted and as currently contemplated to be conducted and as currently contemplated to be conducted. Bona has never approved, or commenced any proceeding or made any election contemplating, the dissolution or liquidation of Bona or the winding up or cessation of the business or affairs of Bona. 

 

	
    

	
 (b) 

	
 Authorization; No Outstanding Consent  Bona (i) has taken all necessary corporate actions to authorize its execution, delivery and performance of this Agreement and all related documents and has the corporate power and authorization to execute, deliver and perform this Agreement and the other related documents; (ii) has the absolute and unrestricted right, power, authority, and capacity to execute and deliver this Agreement and the other related documents and to perform their obligations under this Agreement and the other related documents; (iii) is not required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the exclusive cooperation arrangement contemplated under this Agreement except for any notices that have been duly given or consents that have been duly obtained; and (iv) holds all the governmental authorizations necessary to permit Bona to lawfully conduct and operate its business in the manner it currently conducts and operates such business and to permit Bona to own and use its assets in the manner in which it currently owns and uses such assets. To the best knowledge of Bona, there is no basis for any governmental authority to withdraw, cancel or cease in any manner any of such governmental authorizations. 

 

	
    

	
 (c) 

	
 No Conflicts.  The execution and perform of this Agreement by Bona will not contravene, conflict with, or result in violation of (i) any provision of the organizational documents of Bona; (ii) resolution adopted by the board of directors or the shareholders of Bona; and (iii) any laws and regulations to which Bona or the exclusive cooperation arrangement contemplated in this Agreement is subject. 

 

 10.           Representations and Warranties of Lianhe. 

 

 Lianhe hereby makes the following representations and warranties for the benefit of Bona and the Shareholders: 

 

	
    

	
 (a) 

	
 Corporate Existence and Power  Lianhe (i) is a foreign invested company duly organized and validly existing under the laws of the PRC, and has all corporate powers and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted and as currently contemplated to be conducted and as currently contemplated to be conducted; and (ii) has not ever approved, or commenced any proceeding or made any election contemplating, the dissolution or liquidation of Lianhe or the winding up or cessation of the business or affairs of Lianhe. 

 

    

 7 

    

 

	
    

	
 (b) 

	
 Authorization; No Outstanding Consent  Lianhe (i) has taken all necessary corporate actions to authorize its execution, delivery and performance of this Agreement and all related documents and has the corporate power and authorization to execute, deliver and perform this Agreement and the other related documents; (ii) has the absolute and unrestricted right, power, authority, and capacity to execute and deliver this Agreement and the other related documents and to perform its obligations under this Agreement and the other related documents; (iii) is not required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the exclusive cooperation arrangement contemplated under this Agreement except for any notices that have been duly given or consents that have been duly obtained; and  (iv) has all the governmental authorizations necessary to permit Lianhe to lawfully conduct and operate its business in the manner it currently conducts and operates such business and to permit Lianhe to own and use its assets in the manner in which it currently owns and uses such assets. To the best knowledge of Lianhe, there is no basis for any governmental authority to withdraw, cancel or cease in any manner any of such governmental authorizations. 

 

	
    

	
 (c) 

	

 No Conflicts.  The execution and perform of this Agreement by Lianhe will not contravene, conflict with, or result in violation of (i) any provision of the organizational documents of Lianhe; (ii) any resolution adopted by the board of directors or the shareholders of Lianhe; and (iii) any laws and regulations to which Lianhe or the exclusive cooperation arrangement contemplated in this Agreement is subject to. 

 

 11.           Liability for Breach; Indemnification and Hold Harmless 

 

 Each of the Parties will be liable to each of the other Parties for any damage or loss caused by such Party’s breach of this Agreement.  Loss thereunder shall include any and all direct economic loss, any reasonably receivable indirect economic loss, and any expenses related which shall include but not limited to expenses of attorney, litigation, arbitration and trip.  Bona and the Shareholders will, jointly and severally, indemnify and hold harmless Lianhe from and against any claims, losses or damages claimed or asserted by any other party in connection with the transactions contemplated by this Agreement unless such claims, losses or damages is caused by any breach by Lianhe of its obligations under this Agreement or by the willful, reckless or illegal conduct of Lianhe. Lianhe will indemnify and hold harmless Bona or the Shareholders from and against any claims, losses or damages claimed or asserted by any other party in connection with the transactions contemplated by this Agreement unless such claims, losses or damages is caused by any breach by Bona or the Shareholders of its obligations under this Agreement or by the willful, reckless or illegal conduct of Bona or the Shareholders. 

 

    

 8 

    

 

 12.           Liquidated Damages 

 

 Bona and the Shareholders acknowledge and agree that Lianhe will be incurring significant expense in order to fulfill its obligations under this Agreement. Bona and the Shareholders further acknowledge that breach of this Agreement by any of them would cause Lianhe and Lianhe’s stockholders significant damages and perhaps the complete cessation of Lianhe’s business. Since the exact amount of such damages would be extremely difficult, if not impossible to calculate, Bona and the Shareholders agree that in the event of the material breach by any of them of this Agreement, which breach has not been cured within sixty (60) calendar days of receipt of notice from Lianhe of such material breach and a description of such breach, Bona and the Shareholders, jointly and severally, will be obligated to pay to Lianhe liquidated damages in an amount equal to the greater of (a) three time(s) the annualized revenues of Lianhe for the last completed fiscal quarter, or (b) US$ 1 million(s). 

 

 13.           Dispute Resolution 

 

	
    

	
 (a) 

	

 Friendly Consultations  Any and all disputes, controversies or claims arising out of or relating to the interpretation or implementation of this Agreement, or the breach hereof or relationships created hereby, will be settled through friendly consultations. 

 

	
    

	
 (b) 

	
 Arbitration  If any such dispute is not resolved through friendly consultations within sixty (60) calendar days from the date a Party gives the other Parties written notice of a dispute Any dispute or claim arising out of or in connection with this Agreement shall be submitted to the China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration in Beijing in accordance with the CIETAC arbitration rules that are in effect at the time the application for arbitration is submitted. 

 

	
    

	
 (i) 

	
 The arbitral tribunal shall consist of three (3) arbitrators.  Lianhe shall appoint one (1) arbitrator, Bona and the Shareholders shall appoint one (1) arbitrator, and the third and presiding arbitrator shall be appointed by CIETAC. 

	
    

	
 (ii) 

	
 The arbitration proceedings shall be conducted in Chinese.  When the arbitral tribunal is holding a hearing, if any of the Parties or their agents or witnesses require English translation, such translation may be provided in accordance with the arbitration rules, and the costs and expenses for such translation service shall be borne by the Party requesting the service. 

	
    

	

 (iii) 

	

 The arbitration award shall be final and binding upon all Parties. 

 

	
    

	
 (iv) 

	
 During the period when a dispute is being resolved, the Parties shall in all other respects continue their implementation of this Agreement. 

    

 9 

    

 

 14.           Term 

 

 This Agreement is effective as of the date this Agreement is executed by the Parties, and will continue in effect for a period of nineteen (19) years which shall equal the operation period of Lianhe as specified in Lianhe’s Business License or as may be extended by Lianhe on a future date, or until terminated by one of the following means. The period during which this Agreement is effective is referred to as the “Term”. 

 

	
    

	
 (a) 

	
 Mutual Consent This Agreement may be terminated at any time by the mutual consent of the Parties, evidenced by an agreement in writing signed by all Parties. 

 

	
    

	
 (b) 

	
 Breach or Insolvency  Either of Bona or Lianhe may terminate this Agreement immediately (a) upon the material breach by the other of its obligations hereunder and the failure of such Party to cure such breach within thirty (30) calendar days after written notice from the non-breaching Party; or (b) upon the filing of a voluntary or involuntary petition in bankruptcy by the other or of which the other is the subject, or the insolvency of the other, or the commencement of any proceedings placing the other in receivership, or of any assignment or distribution by the other for the benefit of creditors. 

 

	
    

	
 (c) 

	
 Termination by Lianhe  This Agreement may be terminated at any time by Lianhe upon ninety (90) calendar days’ written notice delivered to all other Parties. 

 

	
    

	
 (d) 

	
 Survival  The provisions of Section 11 (Liability for Breach; Indemnification; Hold Harmless); Section 12 (Liquidated Damages), Section 13 (Dispute Resolution), and Section 15 (Miscellaneous) will survive the termination of this Agreement. Any amounts owing from any Party to any other Party on the effective date of any termination under the terms of this Agreement will continue to be due and owing despite such termination. 

 

 15.           Miscellaneous 

 

	
    

	
 (a) 

	
 Governing Law  The execution, validity, interpretation, performance, amendment and termination of this Agreement shall be governed by the laws of the PRC. 

 

	
    

	
 (b) 

	
 Effectiveness  This Agreement shall become effective and legally binding on the Parties upon its execution by the duly authorized representatives of the Parties. 

 

	
    

	
 (c) 

	
 Amendment  Unless otherwise provided under this Agreement, any amendment to the Agreement shall come into effect only after a written agreement is duly executed by the Parties. 

 

	
    

	
 (d) 

	
 Expenses  Unless PRC laws have otherwise provided, Bona shall pay all stamps, documentary or Taxes and Lianhe’s out-of-pocket expense and internal charges of this Agreement in connection with any payment made hereunder. 

 

    

 10 

    

 

	
    

	
 (e) 

	
 No Waiver  No delay or omission to exercise any right, power or remedy accruing to any Party upon any breach or default of any other Party hereto under this Agreement, shall impair any such right, power or remedy of the aggrieved Party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach of default thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Party of any breach or default under this Agreement or any waiver on the part of any Party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to the Parties shall be cumulative and not alternative. 

 

	
    

	
 (f) 

	
 Entire Agreement  This Agreement, and other contracts and documents referred to herein or incorporated by express reference, constitute the entire agreement among the Parties with respect to the subject matter of this Agreement and supersede all previous verbal and written agreements, contracts, undertakings and communications of the Parties with respect to the subject matter of this Agreement. 

 

	
    

	
 (g) 

	
 Severability  If any clause of this Agreement is deemed illegal or unenforceable under applicable PRC laws, such clause shall be deemed to have been deleted from this Agreement and have no effect. Other terms and conditions of this Agreement shall remain effective and this Agreement shall be deemed to have excluded such invalid clause from the initial execution of this Agreement. 

 

	
    

	
 (h) 

	
 Confidentiality  For five (5) years from the date of this Agreement, each Party shall strictly maintain the confidentiality of all Confidential Information, and shall not, directly or indirectly, disclose, use or exploit such information for any purpose other than the good faith performance of this Agreement. 

 

	
    

	   	 As used herein, “Confidential Information” means: (i) the existence and contents of this Agreement and all the agreements and documents referred to herein or otherwise incorporated by reference; and (ii) any information, documents or data in any form that may contain non-public information relating to any Party, including technical information, data, processes and methodologies, trade secrets, market analyses, pricing information, customer lists, research, software, general know-how, designs and commercial and other proprietary or confidential information or data and any financial results or information. 

 

	
    

	
 (i) 

	
 Survival  The representations, warranties, covenants and agreements made herein shall survive the closing of the transactions contemplated hereby. 

 

	
    

	
 (j) 

	
 Successors and Assigns  Except as otherwise provided in this Agreement, no Party may assign or transfer any of its/his rights or obligations under this Agreement without prior written consent of the other Party. The provisions of this Agreement shall inure to the benefit of, and shall be binding upon, the successors and permitted assigns of the Parties hereto. 

 

    

 11 

    

 

	
    

	
 (k) 

	
 Language  This Agreement is written in both in English and Chinese and these two language versions are accurate. The Parties hereby review both of these two language versions and confirm that their contents are substantially consistent in all material factors. If there is any inconsistency in these two versions, the Chinese version shall prevail. 

 

	
    

	
 (l) 

	
 Counterpart  This Agreement is executed in Beijing, the PRC, by the duly authorized representatives of all Parties in three (3) original copies (both Chinese and English versions for each copy).  Each party will keep one original copy. 

 

	
    

	
 (m) 

	
 Further Assurances  From and after the date of this Agreement, upon the request of a Party, the other Party to whom the request is directed shall execute and deliver such instruments, documents or other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement. 

 

 

 [Signature Page Follows] 

 

 

 

    

 12 

    

 

 IN WITNESS WHEREOF, the Parties hereto have executed this Exclusive Management Consulting Services Agreement as of the date first above written. 

 

 

	 Beijing Hui Zhong Bo Na Media Advertising Co., Ltd. 

 (北京汇众博纳传媒广告有限公司) 

	
 Hui Zhong Lian He Media Technology Co., Ltd. 

 (汇众联合传媒科技有限公司) 

	   	   
	   	   
	 By:  	   	   	 By:  	   	   
	   	   	   	   	   	   
	 Name:    	   	   	 Name:    	   	   
	   	   	   	   	   	   
	 Title:   	   	   	 Title:   	   	   
	   	   	   	   
	   	   	   	   
	  SHAREHOLDERS: 	   	   	   
	   	   	   	   
	   	   	   	   
	   	   	   	   	   
	 Dayong Hao (郝大勇) 	   	   	   
	   	   	   	   
	   	   	   	   
	   	   	   	   	   
	 Kaiyin Liu (刘凯音) 	   	   	   

 

 

 

    

 13 

    

 

 APPENDIX A 

 

 Definitions 

 

 For purposes of the Exclusive Management Consulting Services Agreement between Lianhe, Bona and the Shareholders, to which this is Appendix A, the following terms have the meanings set forth below: 

 

 “Affiliate” shall mean a legal entity or natural person that, directly or indirectly, is owned or controlled by, or under common ownership or control with, a Party hereto (for purposes of this Agreement, “Owns” or “Controls” means owns directly or indirectly more than fifty percent (50%) of the voting shares of a business enterprise, or controls a business enterprise by having the right to appoint more than half of the members of the board of directors of the business enterprise or the right to cast the deciding vote in the event of a tie vote of a board of directors of which it has the right to appoint one-half of the members of the board of directors). 

 

 “Best Efforts” means the efforts that a prudent Person desiring to achieve a particular result would use in order to ensure that such result is achieved as expeditiously as possible. 

 

 “Business” is defined in the Recitals. 

 

 “Business Cooperation Agreements” means the following agreements between the Parties and/or their Affiliates: (a) the Exclusive Management Consulting Services Agreement between and among Lianhe, Bona and the Shareholders dated as of January 1, 2008; (b) Exclusive Technology Consulting Services Agreement between and among Lianhe, Bona and the Shareholders dated as of January 1, 2008;(c) the Equity Pledge Agreement between and among Lianhe, Bona and the Shareholders dated as of January 1, 2008;and (d) the Option Agreement between and among Lianhe, Bona and the Shareholders dated as of January 1, 2008. 

 

 “Company Bank Accounts” means all accounts maintained or held in the name of Bona at or with any bank or other financial institution, whether existing on the date of this Agreement or established in the future. 

 

 “Consent” means any approval, consent, ratification, permission, waiver or authorization, including any of the foregoing issued or granted by any Governmental Authority. 

 

 “Governmental Authority” means any nation or government or any province or state any other political subdivision thereof; any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any government authority, agency, department, board, commission or instrumentality of the People’s Republic of China or any political subdivision thereof; any court, tribunal or arbitrator; and any self-regulatory organization. 

 

 “Intellectual Property” means any patent, patent application, trademark (whether registered or unregistered and whether or not relating to a published work), trademark application, trade name, fictitious business name, service mark (whether registered or unregistered), service mark application, copyright (whether registered or unregistered), copyright application, maskwork, maskwork application, trade secret, know-how, franchise, system, computer software, invention, design, blueprint, proprietary product, technology, proprietary right, and improvement on or to any of the foregoing, or any other intellectual property right or intangible asset. 

 

    

 14 

    

 

 “Law” means all applicable provisions of all (a) constitutions, treaties, statutes, laws (including the common law), codes, rules, regulations, ordinances or orders of any Governmental Authority, (b) governmental approvals and (c) orders, decisions, injunctions, judgments, awards and decrees of or agreements with any Governmental Authority. 

 

 “Legal Requirement” means any national (or federal), provincial, state, local, municipal, foreign or other constitution, law, statute, legislation, constitution, principle of common law, resolution, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, ruling, directive, pronouncement, requirement, specification, determination, decision, opinion or interpretation issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Authority. 

 

 “Lien” means any mortgage, pledge, deed of trust, hypothecation, right of others, claim, security interest, encumbrance, burden, title defect, title retention agreement, lease, sublease, license, occupancy agreement, easement, covenant, condition, encroachment, voting trust agreement, interest, option, right of first offer, negotiation or refusal, proxy, lien, charge or other restrictions or limitations of any nature whatsoever, including but not limited to such Liens as may arise under any contract. 

 

 “Management Services” is defined in Section 1. 

 

 “Material Action” means any of the actions set forth in Appendix C. 

 

  “Net Profit” means the net profit of Bona under generally accepted accounting principles. 

 

 “Person” means an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. 

 

  “Reasonable Business Judgment” means a judgment reached in good faith and in the exercise of reasonable care. 

 

  “Sales Revenue” means the sales revenue of Bona according to the generally accepted accounting principle. 

 

 “Taxes” means with respect to any Person, (a) all income taxes (including any tax on or based upon net income, gross income, income as specially defined, earnings, profits or selected items of income, earnings or profits) and all gross receipts, sales, use, ad valorem, transfer, franchise, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property or windfall profits taxes, alternative or add-on minimum taxes, customs duties and other taxes, fees, assessments or charges of any kind whatsoever, together with all interest and penalties, additions to tax and other additional amounts imposed by any taxing authority (domestic or foreign) on such Person (if any) and (b) any liability for the payment of any amount of the type described in the clause (a) above as a result of being a “transferee” of another entity or a member of an affiliated or combined group, and “Tax” will have the correlative meaning. 

 

    

 15 

    

 

 “Tax Return” means any return (including any information return), report, statement, declaration, estimate, schedule, notice, notification, form, election, certificate or other document or information that is, has been or may in the future be filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Legal Requirement relating to any Tax. 

 

 “Term” is defined in Section 0. 

 

 “Transition” is defined in Section 7. 

 

    

 16 

    

 

 APPENDIX B 

 

 Management Services 

 

 For purposes of the Exclusive Management Consulting Services Agreement among Lianhe, Bona and the Shareholders, to which this is Appendix B, “Management Consulting Services” means consulting services or other related services relating to the following aspects, subject to the ultimate supervision and direction of the shareholders’ meeting and/or board of directors of Bona: 

 

  (a)            All aspects of the day-to-day operations of Bona, including its relationships with its customers, its performance under agreements or other arrangements with any other parties, its compliance with applicable laws and regulations; 

 

  (b)           The appointment, hiring, compensation (including any bonuses, non-monetary compensation, fringe and other benefits, and equity-based compensation), firing and discipline of all directors, senior executives (including but not limited to general manager and chief financial officer), employees, consultants, agents and other representatives of Bona; 

 

  (c)            Establishment, maintenance, termination or elimination of any plan or other arrangement for the benefit of any employees, consultants, agents, representatives or other personnel of Bona; 

 

  (d)           Management, control and authority over all accounts receivable, accounts payable and all funds and investments of Bona; 

 

  (e)           Management, control and authority over Company Bank Accounts; 

 

  (f)            Any expenditure, including any capital expenditure, of Bona; 

 

  (g)           The entry into, amendment or modification, or termination of any contract, agreement and/or other arrangement to which Bona is, was, or would become a party; 

 

  (h)           The acquisition, lease or license by Bona of any assets, supplies, real or personal property, or intellectual or other intangible property; 

 

  (i)            The acquisition of or entry into any joint venture or other arrangement by Bona with any other Person; 

 

  (j)            Any borrowing or assumption by Bona of any liability or obligation of any nature, or the subjection of any asset of Bona to any Lien; 

 

  (k)           Any sale, lease, license or other disposition of any asset owned, beneficially owned or controlled by Bona; 

 

  (l)            Applying for, renewing, and taking any action to maintain in effect, any permits, licenses or other authorizations and approvals necessary for the operation of Bona’s business; 

 

    

 17 

    

 

  (m)          The commencement, prosecution or settlement by Bona of any litigation or other dispute with any other Person, through mediation, arbitration, lawsuit or appeal; 

 

  (n)           The declaration or payment of any dividend or other distribution of profits of Bona; 

 

  (o)           The preparation and filing of all Tax Returns, the payment or settlement of any and all Taxes, and the conduct of any proceedings with any Governmental Authority with respect to any Taxes; and 

 

  (p)           The carrying out of the Transition, as defined in Section 7. 

 

 

 

    

 18 

    

 

 APPENDIX C 

 

 Material Actions 

 

 For purposes of the Exclusive Management Consulting Services Agreement between Lianhe, Bona and the Shareholders, dated as of January 1, 2008, to which this is Appendix C, “Material Actions” means any of the following: 

 

  (a)           Any change to the organizational or charter documents of Bona; 

 

  (b)          Any issuance of new equity in Bona, including any securities convertible into equity of Bona, or the acceptance by Bona of any equity investment, or the repurchase or redemption of any equity of Bona; 

 

  (c)           Any hiring, firing, or discipline of any person who is an executive employee or director of Bona; 

 

  (d)           The purchase of any material asset by Bona; 

 

  (e)           The sale, conveyance, licensing or pledge of any material asset of Bona, including, without limitation, any material Intellectual Property of Bona; 

 

  (f)            Entering into, amending, supplementing, terminating or otherwise modifying any agreement, contract or other arrangement to which Bona is or could become a party, having a value or impact on Bona, individually or in the aggregate, in excess of RMB 3,000,000; 

 

  (g)           Incurring any indebtedness or similar obligation to third parties or subjecting of any of the equity or assets of Bona to any Lien; 

 

  (h)           Investing in, incorporating or otherwise creating any Affiliate or joint venture or purchasing or otherwise acquiring any stock or any equity interest in any entity or business, in one or a series of related transactions, or disposing of any of the foregoing; 

 

  (i)            Any change to the compensation of any employee, consultant or other representative of Bona; 

 

  (j)            Any transaction, action or agreement by any of Bona other than in the ordinary course of business; 

 

  (k)           Any transaction, contract or agreement between Bona and any Shareholder; 

 

  (l)             Declaring or paying dividends on, or making any distributions to any capital stock, except in accordance with the instruments defining the rights of any such capital stock or securities; 

 

  (m)          The initiation or settlement of any litigation or arbitration involving Bona; 

 

  (n)           Approving the annual budget and multi-year business plan for Bona; 

 

    

 19 

    

 

  (o)           Approving Bona’s final audits of Bona’s annual consolidated financial statements and tax returns to be filed by Bona with any taxing authority; 

 

  (p)           Any material change in Bona’s accounting or tax policies or a change of Bona’s independent auditor; and 

 

  (q)           Any change in the number of directors of Bona, except as a result of the operation of any other provisions of this Agreement. 

 

 

 

    

 20 

    

 

	
    

	
 Exhibit I 

 Company Details 

  

	 Company Name: 	 Beijing Hui Zhong Bo Na Media Advertising Co., Ltd. 

 

	
 Registered Address: 

	
 Room 701, Building One, No.2 Deshengmenwaidajie Avenue, Xicheng District, Beijing, People’s Republic of China. 

 

 Registered Capital:RMB10,000,000 

 Legal Representative:李锦甜 

 Share Structure: 

	
 Name of Shareholders 

	
 Contribution Amount (RMB) 

	
 Share Proportion Held 

	
 Dayong Hao 

 

	
 5,000,000 

	
 50% 

	
 Kaiyin Liu 

 

	
 5,000,000 

	
 50% 

	
 Total Amount 

 

	
 10,000,000 

	
 100% 

 Directors: 李锦甜 

 General Manager:李锦甜 

 Finance Year:31st December 

 

 

 21

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