Document:

Exhibit 10.15

PLEDGE AGREEMENT

SHARE PLEDGE AGREEMENT (“Agreement”) dated as of September 19, 2007, by Clive Ng (“Pledgor”), in favor of THE PERSONS AND ENTITIES LISTED ON THE SCHEDULE OF INVESTORS attached hereto as Schedule III (each an “Investor”, and collectively, the “Investors”).

RECITALS

A. Pursuant to the Purchase Agreement dated as of September 19, 2007, by and among China Cablecom Ltd., a British Virgin Islands company (“Company”) and Investors (including all annexes, exhibits and schedules thereto, and as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”), Investors have agreed to purchase from Company the Units (as defined in the Purchase Agreement).

B. Pledgor is the record and beneficial owner of the Stock of Company listed as owned by it in Schedule I attached hereto and, accordingly, will derive direct and indirect economic benefits as a result of the purchase of the Units by Investors under the Purchase Agreement.

C. In order to induce Investors to purchase the Units pursuant to the terms of the Purchase Agreement, Pledgor has agreed to pledge the Pledged Collateral (as defined below) to Investors at the First Closing (as defined in the Purchase Agreement) in the amount set forth in Schedule I in accordance herewith. These recitals shall be construed as part of this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Pledgor and Investors agree as follows:

1. Definitions. Unless otherwise defined herein, capitalized terms or matters of construction defined or established in the Notes shall be applied herein as defined or established therein, and the following terms shall have (unless otherwise provided elsewhere in this Agreement) the following respective meanings (such meanings being equally applicable to both the singular and plural forms of the terms defined):

“Governmental Authority” means any nation or government, any state or other political subdivision thereof, and any agency, department or other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“Pledged Collateral” has the meaning assigned to it in Section 2 below.

 

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“Pledged Stock” means those shares of or interests in Stock listed in Schedule I attached hereto.

“Secured Obligations” has the meaning assigned to it in Section 3 below.

“Stock” means all shares, options, warrants, general or limited partnership interests, membership interests, or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity whether voting or nonvoting, including common stock, preferred stock or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934).

2. Pledge. Pledgor hereby pledges to Investors and grants to Investors a first priority Lien on the Pledged Stock owned by Pledgor and the certificates, if any, representing such Pledged Stock and all dividends, distributions, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such Pledged Stock (collectively, the “Pledged Collateral”).

3. Security for Obligations. This Agreement secures, and the Pledged Collateral is security for, the prompt payment in full when due, whether at stated maturity, by acceleration or otherwise, and performance of the Obligations, including all obligations of Pledgor now or hereafter existing under this Agreement, together with all fees, costs and expenses of enforcement of this Agreement whether in connection with collection actions hereunder or otherwise (collectively, the “Secured Obligations”).

4. Non-Recourse Nature of Guaranty and Pledge. In consideration of the purchase of the Notes by Investor for the benefit of Company and Pledgor, and for other valuable consideration, the receipt and adequacy of which Pledgor hereby acknowledges, Pledgor hereby unconditionally and irrevocably guarantees to Investors the prompt payment (whether at stated maturity, by acceleration or otherwise) and performance of the Obligations. Notwithstanding the generality of the foregoing or any contrary term or provision contained herein, it is understood and agreed that Investors’ sole recourse hereunder against Pledgor shall be limited to the Pledged Collateral, and Pledgor shall not have any personal liability hereunder in the event that the Pledged Collateral proves to be insufficient to satisfy the
Secured Obligations.

5. Delivery of Pledged Collateral. All certificates, if any, evidencing the Pledged Collateral shall be delivered to and held by or on behalf of Investors pursuant hereto. All Pledged Stock, if certificated, shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to Investors.

6. Representations and Warranties. Pledgor represents and warrants to Investors that:

(a) Pledgor’s principal residence is set forth in Section 19 below;

(b) Pledgor is, and at the time of pledge of the Pledged Stock owned by it to Investors will be, the sole holder of record and the sole beneficial owner of such Pledged 

 

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Collateral free and clear of any Lien thereon or affecting title thereto, except for any Lien created by this Agreement or the other Transaction Documents;

(c) Pledgor has the right and requisite authority to pledge, assign, transfer, deliver, deposit and set over the Pledged Collateral pledged by Pledgor to Investors as provided herein;

(d) none of the Pledged Stock owned or held by Pledgor has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject;

(e) (i) Pledgor is the sole owner of the Pledged Stock pledged by it hereunder and such Pledged Stock, if certificated, is presently represented by the certificates listed in Schedule I attached hereto, and (ii) as of the date hereof, there are no existing options, warrants, calls or commitments of any character whatsoever relating to the Pledged Stock pledged by Pledgor hereunder;

(f) no consent, approval, authorization or other order or other action by, and no notice to or filing with, any Governmental Authority or any other Person is required (i) for the pledge by Pledgor of the Pledged Collateral owned or held by it pursuant to this Agreement or for the execution, delivery or performance of this Agreement by Pledgor, or (ii) for the exercise by Investors of the voting or other rights provided for in this Agreement or the remedies in respect of such Pledged Collateral pursuant to this Agreement, except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally;

(g) the pledge, assignment and delivery of the Pledged Collateral owned or held by Pledgor pursuant to this Agreement will create a valid first priority Lien in favor of Investors upon such Pledged Collateral and the proceeds thereof securing the payment of the Secured Obligations, subject to no other Lien; and

(h) this Agreement has been duly authorized, executed and delivered by Pledgor and constitutes a legal, valid and binding obligation of Pledgor enforceable against Pledgor in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency and other similar laws and equitable principals affecting creditors’ rights generally.

The representations and warranties set forth in this Section 6 shall survive the execution and delivery of this Agreement.

7. Covenants. Pledgor covenants and agrees that, without the prior written consent of a Majority in Interest of Investors:

(a) Pledgor will not sell, assign, transfer, pledge, or otherwise encumber any of its rights in or to any Pledged Collateral owned or held by it, or any unpaid dividends or other distributions or payments with respect to such Pledged Collateral, or grant a Lien on such Pledged Collateral;

(b) subject to Section 4 above, Pledgor: (i) will, at its reasonable expense, promptly execute, acknowledge and deliver all such instruments and documents and all such 

 

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property evidencing the Pledged Collateral and take all such actions as Investors from time to time may request in order to ensure to Investors the benefits of the Liens intended to be created by this Agreement upon the Pledged Collateral owned or held by it; and (ii) will cooperate with Investors in obtaining all necessary approvals and making all necessary filings under applicable laws in connection with such Liens or, following an Event of Default, any sale or transfer of such Pledged Collateral;

(c) Pledgor has and will defend title to the Pledged Collateral owned or held by it and the Liens of Investors on such Pledged Collateral against the claim of any Person and will maintain and preserve such Liens; and

(d) Pledgor will, upon obtaining ownership of any additional Stock of Company that does not already constitute Pledged Collateral hereunder, promptly (and in any event within three business days after it acquires any such additional Stock) deliver to Investors a Pledge Amendment, duly executed by Pledgor, in substantially the form of Schedule II attached hereto (each, a “Pledge Amendment”), in respect of any such additional Stock, pursuant to which Pledgor shall pledge to Investors all of such additional Stock, and Pledgor hereby authorizes Investors to attach each such Pledge Amendment to this Agreement and agrees that all Pledged Stock listed in any such Pledge Amendment delivered to Investors shall for
all purposes hereunder be considered Pledged Collateral.

8. Pledgor’s Rights. So long as no Event of Default shall have occurred and be continuing:

(a) Pledgor shall have the right, from time to time, to vote and give consents with respect to the Pledged Collateral or any part thereof pledged by it hereunder for all purposes not inconsistent with the provisions of this Agreement, the Purchase Agreement or any other Transaction Document; provided, that no vote shall be cast, and no consent shall be given or action taken, that would have the effect of impairing the position or interest of Investors in respect of such Pledged Collateral or that would authorize, effect or consent to (unless and to the extent expressly permitted by the Purchase Agreement or as contemplated by the Agreement and Plan of Merger with Jaguar Acquisition Corporation):

(i) the dissolution or liquidation, in whole or in part, of Company;

(ii) the consolidation or merger of Company with any other Person;

(iii) the sale, disposition or encumbrance of all or substantially all of the assets of Company, except for Liens in favor of Investors and any other Permitted Liens;

(iv) any change in the authorized number of shares of, the amount of interest in, or the stated capital or the authorized share capital of, Company or the issuance of any additional shares of or interests in its Stock; or

(v) the alteration of the voting rights with respect to the Stock of Company.

 

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(b) Pledgor shall be entitled, from time to time, to collect and receive for its own use all cash dividends and other distributions paid in respect of the Pledged Stock pledged by it hereunder to the extent not in violation of the Purchase Agreement, except for any and all: (i) dividends and other distributions paid or payable other than in cash in respect of any such Pledged Collateral and other property received, receivable or otherwise distributed in respect of, or in exchange for, any such Pledged Collateral; (ii) dividends and other distributions paid or payable in cash in respect of any such Pledged Stock in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in capital of Company; and (iii) cash paid, payable or otherwise distributed in redemption of, or in exchange for, any such Pledged
Collateral; provided, that until actually paid all rights to such distributions shall remain subject to the Lien in favor of Investors created by this Agreement and the other Transaction Documents.

(c) All dividends and other distributions in respect of any of the Pledged Stock (other than such cash dividends and other distributions as are permitted to be paid to Pledgor in accordance with Section 8(b) above, which dividends and distributions shall be free of any Lien in favor of Investors thereon upon receipt thereof by Pledgor), whenever paid or made, shall be delivered to Investors to hold as Pledged Collateral and shall, if received by Pledgor, be received in trust for the benefit of Investors, be segregated from the other property or funds of Pledgor, and be forthwith delivered to Investors as Pledged Collateral in the same form as so received (with any necessary endorsements).

9. Defaults and Remedies; Proxy.

(a) Upon the occurrence and during the continuation of an Event of Default, Investors (personally or through an agent) are hereby authorized and empowered to transfer and register in their name or in the name of their nominee the whole or any part of the Pledged Collateral pledged by Pledgor hereunder, to exchange certificates, if any, representing or evidencing such Pledged Collateral for certificates of smaller or larger denominations, to exercise the voting and all other rights as a holder with respect to the Pledged Collateral, to collect and receive all cash dividends and other distributions made on the Pledged Collateral, to sell in one or more sales after ten days’ notice of the time and place of any public sale or of the time at which a private sale is to take place (which notice Pledgor agrees is commercially reasonable) the whole or any part of such Pledged
Collateral and to otherwise act with respect to such Pledged Collateral as though Investors were the outright owner thereof. Any sale shall be made at a public or private sale at any place to be named in the notice of sale, either for cash or upon credit or for future delivery at such price as Investors may deem fair, and Investors may be the purchaser of the whole or any part of such Pledged Collateral so sold and hold the same thereafter in its own right free from any claim of Pledgor or any right of redemption. Each such sale shall be made to the highest bidder, but Investors reserve the right to reject any and all bids at such sale that, in its discretion, it shall deem inadequate. Demands of performance, except as otherwise herein specifically provided for, notices of sale, advertisements and the presence of property at sale are hereby waived and any sale hereunder may be conducted by an auctioneer or any officer or agent of Investors. EFFECTIVE UPON THE OCCURRENCE AND DURING THE
CONTINUATION OF AN EVENT OF DEFAULT, PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS CHARDAN CAPITAL MARKETS, LLC AS THE PROXY AND ATTORNEY-IN-FACT OF PLEDGOR WITH RESPECT TO THE PLEDGED 

 

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COLLATERAL PLEDGED BY PLEDGOR HEREUNDER, INCLUDING THE RIGHT TO VOTE THE PLEDGED STOCK OF PLEDGOR, WITH FULL POWER OF SUBSTITUTION TO DO SO. THE APPOINTMENT OF CHARDAN CAPITAL MARKETS, LLC AS PROXY AND ATTORNEYIN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL EARLIER OF THE DATE UPON WHICH THE OBLIGATIONS HAVE BEEN COMPLETELY DISCHARGED OR THE EFFECTIVENESS OF THE REGISTRATION STATEMENT REFERRED TO IN THE REGISTRATION RIGHTS AGREEMENT APPEARING AS EXHIBIT D TO THE PURCHASE AGREEMENT (THE “TERMINATION DATE”).
IN ADDITION TO THE RIGHT TO VOTE THE PLEDGED STOCK OF PLEDGOR, THE APPOINTMENT OF CHARDAN CAPITAL MARKETS, LLC AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED STOCK WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF STOCKHOLDERS, CALLING SPECIAL MEETINGS OF STOCKHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF SUCH PLEDGED STOCK ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED STOCK OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT. NOTWITHSTANDING THE FOREGOING, CHARDAN CAPITAL MARKETS, LLC SHALL NOT HAVE ANY DUTY TO EXERCISE ANY SUCH RIGHT OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO.

(b) If, at the original time or times appointed for the sale of the whole or any part of the Pledged Collateral pledged by Pledgor hereunder, (i) the highest bid, if there is but one sale, shall be inadequate to discharge in full all the Secured Obligations, or (ii) such Pledged Collateral is offered for sale in lots, the highest bid for the lot offered for sale at any of such sales would indicate to Investors, in their discretion, that the proceeds of the sales of the whole of such Pledged Collateral would be unlikely to be sufficient to discharge all the Secured Obligations, then Investors may, on one or more occasions and in their discretion, postpone any of said sales by public announcement at the time of sale or the time of previous postponement of sale, and no other notice of such postponement or postponements of sale need be given, any other notice being hereby waived;
provided, that any sale or sales made after such postponement shall be after ten days’ notice to Pledgor.

(c) Pledgor recognizes that Investors may be unable to effect a public sale of any or all the Pledged Collateral and may be compelled to resort to one or more private sales thereof. Pledgor also acknowledges that any such private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private. Investors shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit Company to register such securities for public sale under the Act, or under applicable securities laws, even if Pledgor and Company would agree to do so.

 

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(d) Pledgor agrees to the maximum extent permitted by applicable law that following the occurrence and during the continuance of an Event of Default it will not at any time plead, claim or take the benefit of any appraisal, valuation, stay, extension, moratorium or redemption law now or hereafter in force in order to prevent or delay the enforcement of this Agreement, or the absolute sale of the whole or any part of the Pledged Collateral or the possession thereof by any purchaser at any sale hereunder, and Pledgor waives the benefit of all such laws to the extent it lawfully may do so. Pledgor agrees that it will not interfere with any right, power or remedy of Investors provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by Investors of any one or more of such rights, powers
or remedies. No failure or delay on the part of Investors to exercise any such right, power or remedy and no notice or demand that may be given to or made upon Pledgor by Investors with respect to any such remedies shall operate as a waiver thereof, or limit or impair Investors’ right to take any action or to exercise any power or remedy hereunder, without notice or demand, or prejudice its rights as against Pledgor in any respect.

(e) Pledgor further agrees that a breach of any of the covenants contained in this Section 9 will cause irreparable injury to Investors, that Investors shall have no adequate remedy at law in respect of such breach and, as a consequence, agrees that each and every covenant contained in this Section 9 shall be specifically enforceable against Pledgor, and Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that the Secured Obligations are not then due and payable in accordance with the agreements and instruments governing and evidencing the Secured Obligations.

10. Waiver. No delay on Investors’ part in exercising any power of sale, Lien, option or other right hereunder, and no notice or demand that may be given to or made upon Pledgor by Investors with respect to any power of sale, Lien, option or other right hereunder, shall constitute a waiver thereof, or limit or impair Investors’ right to take any action or to exercise any power of sale, Lien, option, or any other right hereunder, without notice or demand, or prejudice Investors’ rights as against Pledgor in any respect. Pledgor hereby waives notice of acceptance of this Agreement, presentment, demand, protest and notice of dishonor of any and all of the Secured Obligations, and any delay by Investors in commencing suit against any party hereto or Person liable hereon, and in giving any
notice to or of making any claim or demand hereunder upon Pledgor. No act or omission of any kind on Investors’ part shall in any event affect or impair this Agreement.

11. Termination. Immediately following the Termination Date, Investors shall deliver to Pledgor the Pledged Collateral pledged by Pledgor at the time subject to this Agreement and all instruments of assignment executed in connection therewith, free and clear of the Liens created in favor of Investors under this Agreement and the other Transaction Documents and, except as otherwise provided herein, all of Pledgor’s obligations hereunder shall at such time terminate.

12. Lien Absolute. All rights of Investors hereunder, and all obligations of Pledgor hereunder, shall be absolute and unconditional irrespective of:

 

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(a) any lack of validity or enforceability of the Purchase Agreement, any other Transaction Document or any other agreement or instrument governing or evidencing any Secured Obligations;

(b) any change in the time, manner or place of payment of, or in any other term of, all or any part of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the Purchase Agreement, any other Transaction Document or any other agreement or instrument governing or evidencing any Secured Obligations;

(c) any release or amendment or waiver of, or consent to departure from any guaranty for, all or any of the Secured Obligations;

(d) the insolvency of Pledgor; or

(e) any other circumstance that might otherwise constitute a defense available to, or a discharge of, Pledgor.

13. Release. Pledgor consents and agrees that Investors may, at any time or from time to time, in their discretion:

(a) renew, extend or change the time of payment of, or the manner, place or terms of payment of, all or any part of the Obligations; and

(b) exchange, release or surrender all or any of the Pledged Collateral, or any part thereof that is now or may hereafter be held by Investors in connection with all or any of the Obligations, all in such manner and upon such terms as Investors may deem proper, and without notice to or further assent from Pledgor, it being hereby agreed that Pledgor shall be and remain bound by this Agreement irrespective of the value or condition of any of the Pledged Collateral and notwithstanding any such change, exchange, settlement, compromise, surrender, release, renewal or extension, and notwithstanding also that the Obligations may, at any time, exceed the aggregate principal amount thereof set forth in the Note Purchase Agreement or any other agreement governing any Secured Obligations.

14. Suretyship Waivers. In addition to any other waivers contained herein, Pledgor waives, agrees and acknowledges as follows and waives any defense based upon or arising from the following:

(a) The obligations of Pledgor hereunder are the immediate, direct, primary and absolute liabilities of Pledgor, and are independent of, and not co-extensive with, the Obligations or the obligations of any other Person. Pledgor expressly waives any right it may have now or in the future to direct or affect the manner or timing of Investors’ enforcement of its rights or remedies hereunder or under the other Transaction Documents. Pledgor expressly waives any right it may have now or in the future to require Investors to, and Investors shall not have any liability to, first pursue or enforce its rights and remedies against Company, any other guarantor of the Obligations, any of the properties or assets of Company or such other guarantor, or any other security, guaranty or pledge that may now or hereafter be held by Investors for the Secured Obligations, or to apply such
security, guaranty, or pledge to the Secured Obligations. Pledgor shall remain liable for its obligations hereunder, notwithstanding any judgment Investors 

 

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may obtain against Company, any other guarantor of the Obligations, or any other Person, or any modification, extension or renewal with respect thereto. Investors shall not be under any liability or obligation to marshal any assets in favor of Pledgor or in payment of any or all of the Secured Obligations, all of which are hereby expressly waived.

(b) Pledgor has entered into this Agreement based solely upon its independent knowledge of the financial condition of Company, and Pledgor assumes full responsibility for obtaining any further information with respect to Company or the conduct of its business. Pledgor represents that it is now, and during the term of this Agreement will be, responsible for ascertaining the financial condition of Company. Pledgor hereby waives any duty on the part of Investors to disclose to Pledgor, and agrees that it is not relying upon or expecting Investors to disclose to it, any fact known or hereafter known by Investors relating to the operation or condition of Company or its business or relating to the existence, liability, or financial condition of any other guarantor of the Obligations. Pledgor knowingly accepts the full range of risk encompassed in a contract of pledge, which risk
includes the possibility that Company may incur Obligations after Company’s financial condition or ability to pay debts as they mature has deteriorated.

(c) Except as specifically provided in this Agreement or applicable law, Pledgor waives, to the fullest extent permitted by applicable law: (i) notice of the acceptance by Investors of this Agreement; (ii) notice of the existence, creation, payment, nonpayment, performance or nonperformance of all or any part of the Secured Obligations; (iii) presentment, demand and protest and notice of presentment, dishonor, intent to accelerate, acceleration, protest, default, nonpayment, maturity, release, compromise, settlement, extension or renewal of any or all of the Transaction Documents, notes, commercial paper, accounts, contract rights, documents, instruments, chattel paper and guaranties at any time held by Investors on which Pledgor may be liable in any way, and hereby ratifies and confirms whatever Investors may do in this regard; (iv) all rights to notice and a hearing prior to
Investors’ taking possession or control of, or to Investors’ replevy, attachment or levy upon, the Pledged Collateral or any bond or security that might be required by any court prior to allowing Investors to exercise any of their remedies; (v) all rights to receive notices from Investors with respect to, or otherwise sent to, Pledgor or any guarantor; (vi) the benefit of all valuation, appraisal, stay, extension, redemption and exemption laws; (vii) the benefit of any law purporting to reduce Pledgor’s obligation in proportion to the principal obligation hereby secured; (viii) the benefit of any law purporting to exonerate Pledgor’s obligation upon performance or an offer of performance of the principal obligation; (ix) notice of any extension, modification, renewal, or amendment of any of the terms of any Transaction Documents; (x) notice of the occurrence of any Event of Default; and (xi) notice of any exercise or non-exercise by Investors of any right, power,
or remedy with respect to the Secured Obligations or the Pledged Collateral.

(d) If Investors, under applicable law, may proceed to realize their benefits under any Transaction Document providing for a Lien upon any Pledged Collateral, either by judicial foreclosure or by nonjudicial sale or enforcement, then Investors, at their sole option, may determine which of their remedies or rights they may pursue without affecting any of their rights and remedies under this Agreement.

 

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(e) Pledgor represents that the Secured Obligations are and shall be incurred by Company and Pledgor for business and commercial purposes only. Any claim of Investors against Pledgor arising out of this Agreement arises out of the conduct by Pledgor of its trade, business, or profession. Pledgor undertakes all the risks encompassed in the Transaction Documents as they may be now or are hereafter agreed upon by Investors and Company. Prior to the Termination Date, Investors, in such manner and upon such terms and at such times as they deem best, and with or without notice to Pledgor, may release, add, subordinate or substitute security for the Secured Obligations.

(f) A separate action or actions may be brought and prosecuted against Pledgor whether or not an action is brought against Company, or whether Company is joined in any such action or actions.

15. Reinstatement. This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against Pledgor or Company for liquidation or reorganization, should Pledgor or Company become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of Pledgor’s or Company’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a “voidable preference,” “fraudulent transfer,” or
otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

16. Miscellaneous.

(a) Investors may execute any of their duties hereunder by or through agents or employees and shall be entitled to advice of counsel concerning all matters pertaining to their duties hereunder.

(b) Subject to Section 4 above, Pledgor hereby acknowledges and agrees to promptly reimburse Investors for all actual out-of-pocket expenses, including reasonable counsel fees, incurred by Investors in connection with the administration and enforcement of this Agreement, but only to the extent not reimbursed by Company in accordance with the terms of the Transaction Documents.

(c) Neither Investors nor any of their respective officers, directors, employees, agents or counsel shall be liable for any action lawfully taken or omitted to be taken by them hereunder or in connection herewith, except for their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.

(d) THIS AGREEMENT SHALL BE BINDING UPON PLEDGOR, COMPANY AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS (INCLUDING A TRUSTEE OR DEBTOR-IN-POSSESSION ON BEHALF OF PLEDGOR OR COMPANY), AND SHALL INURE TO THE BENEFIT OF, AND BE ENFORCEABLE BY, INVESTORS 

 

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AND THEIR SUCCESSORS AND ASSIGNS, AND NONE OF THE TERMS OR PROVISIONS OF THIS AGREEMENT MAY BE WAIVED, ALTERED, MODIFIED OR AMENDED EXCEPT IN WRITING DULY SIGNED FOR AND ON BEHALF OF INVESTORS, PLEDGOR AND COMPANY.

17. Governing Law; Jurisdiction; Venue. This Agreement and all acts and transactions hereunder and all rights and obligations of Pledgor, Investors and Company shall be governed by the internal laws (and not the conflict of laws rules) of the British Virgin Islands. Each of Pledgor and Company (i) agrees that all actions and proceedings relating directly or indirectly to this Agreement shall, at the Investors’ option, be litigated in courts located within the British Virgin Islands; (ii) consents to the jurisdiction and venue of any such court and consents to service of process in any such action or proceeding by personal delivery or any other method permitted by law; and (iii) waives any and all rights it may have to
object to the jurisdiction of any such court, or to transfer or change the venue of any such action or proceeding.

18. Severability. If for any reason any provision or provisions hereof are determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or affect those portions of this Agreement that are valid.

19. Notices. All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall in writing and faxed, mailed or delivered to each party as follows:

(a) if to an Investor or to Company, as set forth in the Note Purchase Agreement.

(b) if to Pledgor, at:

111 West 57th Street

Suite 1120

New York, NY  10019

Telephone No.: (212) 888-8882

Facsimile No.:  (212) 253-5095

or at such other address or facsimile number as such party shall have furnished to the other parties in writing. All such notices and communications shall be effective (i) when sent by Federal Express or other overnight service of recognized standing, on the business day following the deposit with such service; (i) when mailed , by international air mail postage prepaid and addressed as aforesaid, upon receipt; (iii) when delivered by hand, upon delivery; and (iv) when faxed or sent by email, upon confirmation of receipt.

20. Section Titles. The section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.

 

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21. Counterparts. This Agreement may be executed in any number of counterparts, which shall, collectively and separately, constitute one agreement. Delivery of an executed counterpart of a signature page hereto by facsimile transmission shall be effective as delivery of a manually executed counterpart thereof.

[remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Guaranty and Pledge Agreement to be duly executed as of the date first written above.

 

	
                         
 	
                         
 	
                        “Pledgor”  
 
	
                          
 	
                         
 	
                        By: 
 	
                        
 /s/ Clive Ng
 
	
                         
 	
                         
 	
                         
 	
                         
 

 

FORM OF OMNIBUS INVESTOR SIGNATURE PAGE TO

GUARANTY AND PLEDGE AGREEMENT

The undersigned, in its capacity as an Investor, hereby executes and delivers the Guaranty and Pledge Agreement to which this signature page is attached and agrees to be bound by the Guaranty and Pledge Agreement on the date set forth on the first page of the Guaranty and Pledge Agreement. This counterpart signature page, together with all counterparts of the Guaranty and Pledge Agreement and signature pages of the other parties named therein, shall constitute one and the same instrument in accordance with the terms of the Guaranty and Pledge Agreement.

 

	
                         
 	
                         
 	
                         
 
	
                        [Print Name of Investor]
 	
                         
 	
                        [Name of Co-Investor, if applicable]
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        [Signature]
 	
                         
 	
                        [Signature]
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        Name: 
 	
                         
 	
                         
 	
                        Name: 
 	
                        __
 
	
                        Title: 
 	
                         
 	
                         
 	
                        Title:
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        Mailing Address:
 	
                         
 	
      Telephone No.: 
 	
                         
 
	
                         
 	
                         
 	
      Facsimile No: 
 	
                         
 
	
                         
 	
                         
 	
      Email Address:
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        (City, State and Zip)
 	
                         
 	
                         
 
									

            

 

 

2

 

 

	
                        Schedules
 	
                         
 	
                        Description
 
	
                        Schedule I
 	
                         
 	
                        Pledged Stock
 
	
                        Schedule II
 	
                         
 	
                        Pledge Amendment
 
	
                        Schedule III
 	
                         
 	
                        Schedule of Investors
 

The contents of the schedules have been omitted. We will furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request.

 

3EXHIBIT 10.30

Framework Agreement

 

by and between

Binzhou Broadcasting and Television Network Co., Ltd.

and

Jinan Youxiantong Network Technology Co., Ltd.

August 2007

 

 

 

	
                        [Execution Copy – Reference Translation]
 

 

 

Table of Contents

 

	
                        Chapter
 	
                         
 	
                        Page
 
	
                        1
 	
                        Definitions and Interpretations
 	
                        3
 
	
                        2
 	
                        Assets Transfer
 	
                        6
 
	
                        3
 	
                        Establishment of New Company
 	
                        7
 
	
                        4
 	
                        Transferred Assets
 	
                        10
 
	
                        5
 	
                        Financial Arrangement
 	
                        10
 
	
                        6
 	
                        Exclusive Cooperation Rights of Business
 	
                        12
 
	
                        7
 	
                        Representations and Warranties
 	
                        12
 
	
                        8
 	
                        Covenants
 	
                        14
 
	
                        9
 	
                        Conditions Precedent
 	
                        16
 
	
                        10
 	
                        Closing
 	
                        17
 
	
                        11
 	
                        Effective Date and Termination
 	
                        18
 
	
                        12
 	
                        Events of Breach
 	
                        19
 
	
                        13
 	
                        Force Majeure
 	
                        20
 
	
                        14
 	
                        Confidentiality
 	
                        21
 
	
                        15
 	
                        Miscellaneous
 	
                        21
 

 

 

	
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This Framework Agreement (Agreement) is entered into on 6 August 2007 in Binzhou, People’s Republic of China (PRC)

by and between 

	
                        (1)
 	
                        Binzhou Broadcasting and Television Network Co., Ltd. (Party A), a PRC company with its registered address at No. 358, Huanghe 5th Road, Binzhou, Shandong Province, PRC, the legal representative of which is Yin Bingming; and
 

	
                        (2)
 	
                        Jinan Youxiantong Network Technology Co., Ltd. (Party B), a PRC company with its registered address at Room 1014 Wenjiao Tower, No.1 Qingnian East Road, Jinan, Shandong Province, PRC, the legal representative of which is Pu Yue.
 

RECITALS

Party A has already obtained the licenses necessary to conduct the Business (as defined below) in the PRC and Party A desires to cooperate and establish a company (New Company) in Binzhou jointly with Party B  in order to cooperate with the operation of the Business.

NOW, THEREFORE, the parties agree as follows:

Chapter 1 Definitions and Interpretations

	
                        1.1
 	
                        Definitions
 

Unless otherwise indicated, the following terms in this Agreement shall have the meanings set forth below:

 

	
      Affiliate
 	
                        in relation to an entity, means a company:

            (a)      in which the entity holds, directly or indirectly, at least 10% 
 of the equity interest or voting rights;

            (b)      which is a Subsidiary of the Parent Company of the entity;

            (c)      which owns or controls, directly or indirectly, the equity interest 
 or voting rights of the Parent Company of the entity; or

            (d)      which is a Subsidiary of the Parent Company of the entity 
 described in (c) above;

   
 

 

 

	
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      Appraisal
 	
                        the respective appraisal on the Assets, Contributed Assets or Transferred  Assets conducted by a qualified appraisal agent;

       
 
	
                        Assets
 	
                        the assets relating to the  Business as listed in Schedule I, which are free of all debts and valued at RMB 289,080,000;

             
 
	
                        Business
 	
                        means:

            •        any business with respect to the design, construction and operation of cable TV projects and networks (including  TV fee collection of distribution net and network leases);

            •        any business with respect to the management of construction, marketing and operation of the analog and digital TV networks and digital TVs (including sale of set-top Boxes, sale of pay-per-program and digital TV fee collection); and

            •        value-added network business (including the cable and wireless broadband access, video-on-demand business, interactive TV-shopping, digital electronic form services, operation services of digital video tape recorder, TV-marketing, publication of electronic information and interactive TV advertisements); 
 
	
Closing
      	
                        

                        the fulfillment of all the conditions precedent listed in Article 9.1 (unless waived in accordance with Article 9.2.3) which shall occur no later than 30 October 2007, unless extended in accordance with Article 9.2.2; 

             
 
	
                        Contributed Assets
 	
                        the assets that are contributed as capital to the New Company by Party A as listed in Schedule II, which are free of all debts and valued at RMB 5,100,000;

             
 
	
                        Exclusive Cooperation Area
 	
                        Binzhou Municipal (Except Bincheng District, Yangxin County, Zhanhua County and Wudi County);

             
 

 

 

	
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                        [Execution Copy – Reference Translation]
 

 

 

 

	
      Force Majeure
 	
                        any earthquake, storm, fire, flood, war or other significant event of natural or human-caused disaster arising after signing hereof which is unavoidable, not possible to overcome and is beyond the control of either party, and prevents the total or partial performance of this Agreement by either party;

       
 
	
                        Government Approvals

             
 	
                        as defined in Article 7.2.5;

             
 
	
                        Parent Company
 	
                        in relation to a company, means a company of which the company is a Subsidiary (as defined below);

             
 
	
                        PRC Law
 	
                        all laws and legislation of the PRC that are in effect, including laws, regulations, resolutions, decisions, decrees and orders of government agencies and other documents of a legislative, administrative or judicial nature; 

             
 
	
                        RMB
 	
                        Renminbi, the lawful currency of the PRC;

             
 
	
                        Subsidiary
 	
                        in relation to a company, means a company in which another company holds, directly or indirectly, 50% or more of the first company’s total equity interest or voting rights; 

             
 
	
                        Tax
 	
                        all forms of taxation, including, without limitation, enterprise income tax, business tax, value-added tax, stamp duty and individual income tax levied by the PRC tax authorities pursuant to PRC Law, as well as any penalty, surcharge or fine in connection therewith;

             
 
	
                        Trade Secret
 	
                        any information relating to this Agreement or the parties, including any information regarding costs, technologies, financial contracts, future business plans and any other information deemed by the parties to be confidential, and which is unknown by the public, has practical value and is of economic benefit to the parties;

             
 
	
      Transaction Documents
 	
                        all documents that require signing under PRC Law in order to complete the transactions contemplated under this Agreement;

             
 

 

 

	
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      Transferred  Assets
 	
                        the assets to be transferred to the New Company post-establishment by Party A as listed in Schedule III, which are free of all debts and valued at RMB 283,980,000; and

       
 
	
                        Transferred Staff
 	
                        as defined in Article 3.5.1.
 

	
      1.2
 	
                        Interpretations
 

All headings used herein are for reference purposes only and do not affect the meaning or interpretation of any provision hereof. Any reference herein to an Article, Chapter or Schedule is to an article, chapter or schedule of this Agreement. The use of the plural shall include the use of the singular, and vice versa. Unless otherwise indicated, a reference herein to a day, month or year is to a calendar day, month or year. A reference to a business day is to a day on which commercial banks are open for business in the PRC. The use of the masculine shall include the use of the feminine, and vice versa. The term “including”, shall mean “including without limitation”.

Chapter 2 Assets Transfer

	
                        2.1
 	
                        Asset Appraisal
 

	
                         
 	
                        2.1.1
 	
                        Party A shall cause its Affiliates (Party A’s Affiliates in relation to the Assets Transfer are listed in Schedule IV) to cause the Appraisal of the Assets.
 

	
                         
 	
                        2.1.2
 	
                        Party A shall provide Party B in 30 days after the signing date of this Agreement with an Assets Appraisal report issued by the aforesaid agent .
 

	
                         
 	
                        2.1.3
 	
                        The Assets Appraisal report issued by the appraisal agency appointed by Party A shall be in the amount of  RMB 289,080,000, by mutual agreement of the Parties. Party A and Party B shall not object to this price under any circumstances.
 

	
                        2.2
 	
                        Assets Transfer
 

	
                         
 	
                        2.2.1
 	
                        Upon the completion of the Appraisal stipulated in Article 2.1, Party A shall cause its Affiliates as listed in Schedule IV to each transfer the respective Assets to Party A.
 

	
                         
 	
                        2.2.2
 	
                        Party A shall obtain all Government Approvals necessary for the Assets transfer (including for the transfer of state-owned
 

 

	
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assets) in accordance with Article 2.2.1. Party A shall ensure that all procedures with respect to Assets transfer will be completed , and it will have obtained the entire ownership of the Assets before 10 October 2007 in accordance with PRC Law.

	
                         
 	
                        2.2.3
 	
                        Party A shall ensure that the Assets obtained by Party A are free from any encumbrances, and that Party A is entitled to exploit its ownership of the Assets or dispose of the Assets freely. 
 

Chapter 3 Establishment of New Company

	
                        3.1
 	
                        New Company
 

	
                         
 	
                        3.1.1
 	
                        As soon as practicable after the completion of the Assets transfer stipulated in Chapter 2, the parties shall each contribute their registered capital in order to establish the New Company. After the establishment of the New Company, the New Company shall cooperate with Party A to operate the Business within the Exclusive Cooperation Area.
 

	
                         
 	
                        3.1.2
 	
                        The registered capital of the New Company shall be RMB 10,000,000. Party A will contribute the Contributed Assets to the New Company and obtain 51% of the equity interests therein;  Party B will make a cash contribution of RMB 4,900,000 to the New Company and obtain 49% of the equity interests therein.
 

	
                        3.2
 	
                        Appraisal of the Contributed Assets
 

	
                         
 	
                        3.2.1
 	
                        Party A shall make an advance payment for the Appraisal on the Contributed Assets . 
 

	
                         
 	
                        3.2.2
 	
                        Party A shall ensure that the Appraisal in Article 3.2.1 shall be completed no later than 15 October 2007.
 

	
                        3.3
 	
                        Establishment of New Company
 

	
                         
 	
                        3.3.1
 	
                        As soon as practicable after the completion of the Appraisal stipulated in Article 3.2, Party A shall promptly contribute the Contributed Assets to  establish the New Company in Binzhou, PRC.
 

	
                         
 	
                        3.3.2
 	
                        Party A shall make advance payment to obtain any and all prior approvals, consents and (or) certificates and filings
 

 

 

	
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necessary for contributing the Contributed Assets to the New Company and obtaining 51% of the equity interests of the New Company under PRC Law. The New Company shall pay back the foregoing expenses  after its establishment.

	
                         
 	
                        3.3.3
 	
                        The amount of Party A’s contribution to the New Company’s registered capital shall be in accordance with the appraised value of the Contributed Assets described in the Appraisal report. Should the appraised value of the Contributed Assets be less than RMB 5,100,000, Party A shall pay the difference by contributing other assets.
 

	
                         
 	
                        3.3.4
 	
                        The New Company’s business scope shall include design, installation and related business of the cable TV projects; design, construction, management and maintenance of the cable TV network; management of the business with respect to the analog TV, digital networks and digital TV, consultation, software, system integration and construction and other value-added business with respect to the cable digital TV as determined by the parties;
 

	
                        3.4
 	
                        Registration of New Company
 

	
                         
 	
                        3.4.1
 	
                        Party A shall make advance payment to cause the New Company to obtain the business license , the tax registration certificate and all other necessary certificates  and filings necessary for the establishment and contemplated operation of the New Company under PRC Law. The New Company shall pay back the foregoing expenses after its establishment.
 

	
                         
 	
                        3.4.2
 	
                        Party A shall ensure that New Company shall obtain all certificates as described in Article 3.4.1 before 22 October, 2007.
 

	
                        3.5
 	
                        Retention / Dismissal of Employees
 

Upon the establishment of New Company, Party A shall:

	
                         
 	
                        3.5.1
 	
                        provide Party B with written notice as to which of Party A’s employees will be retained by the New Company (Transferred Staff), which personnel shall include the individuals listed in Schedule V;  
 

	
                         
 	
                        3.5.2
 	
                        be responsible for the payment of any costs related to any labor disputes that may arise from Transferred Staff in respect of their employment relationship with Party A;
 

	
                         
 	
                        3.5.3
 	
                        ensure that any arrangement made by Party A with the
 

 

 

	
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Transferred Staff shall not give rise to or result in any adverse impact on the employee relations, business, operations or financial or Tax position of Party A or the New Company; nor will any commitment be made, or obligation or liability be incurred, by the New Company;  

In the event that there is any such commitment, obligation or liability (including liability in relation to Tax) in respect of the New Company as mentioned in Article 3.5.3, Party A shall indemnify the New Company from all losses, claims, damages, costs and expenses arising from any and all such commitment, obligation or liability. Further, the rights and obligations between the staff of the New Company and the New Company shall be determined in accordance with the rules and regulations of the New Company. Any legal disputes arising hereunder shall be resolved in accordance with the Labor Law and the Employment Contract Law, which shall be effective 1 January 2008.

	
                         
 	
                        3.5.4
 	
                        make its best effort to cause the Transferred Staff to enter into standard employment contracts, or to enter into employee secondment contracts containing non-competition and confidentiality commitments, so as to second the Transferred Staff to work in the New Company. 
 

	
                        3.6
 	
                        Corporate Governance
 

	
                        3.6.1
 	
                        The New Company shall establish a board of directors (Board), consisting of 5 directors. Party B shall appoint 2 directors, and Party A shall appoint 3 directors.
 

	
                        3.6.2
 	
                        The New Company’s chairman of the Board shall be a director of Party A. general manager shall be appointed by Party A upon the prior written consent of Party B. The CFO shall be appointed by Party B upon the prior written consent of Party A.
 

	
                        3.7
 	
                        Exclusive Cooperation
 

During the term of this Agreement,  Party A shall not, and shall ensure that its shareholders shall not, directly or indirectly cooperate with any 3rd parties (except for Party B and the New Company) with respect to the Business, including by establishing any entity within the Exclusive Cooperation Area.

	
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Chapter 4 Transferred Assets

 

	
                        4.1
 	
                        Transferred Assets
 

	
                         
 	
                        4.1.1
 	
                        Upon the establishment of the New Company, Party A and the New Company shall enter into an assets transfer agreement, under which Party A shall sell to the New Company all of the Transferred Assets in installments. The transfer of all the Transferred Assets shall be set forth in the transfer schedule in the assets transfer agreement mentioned in this Article 4.1.1. The transfer schedule shall be made based on mutual agreement of the parties and the needs of the New Company’s business operations.
 

	
                         
 	
                        4.1.2
 	
                        Party A shall, at its own expense, obtain any and all Government Approvals necessary for the Transferred Assets (including  all approvals necessary for the transfer of state-owned assets) as described in Article 4.1.1. Party A shall ensure that all procedures with respect to the transfer of each part of Transferred Assets will be completed , and the New Company will have obtained the entire ownership of each part of Transferred Assets within [30] days after such part of the Transferred Assets is transferred according to the transfer schedule in the assets transfer agreement, in accordance with PRC Law.
 

	
                         
 	
                        4.1.3
 	
                        Party A shall ensure that the Transferred Assets obtained by the New Company are free from any encumbrances, and  that the New Company is entitled to exploit its ownership of the Transferred Assets or dispose of the Transferred Assets freely. 
 

	
                        4.2
 	
                        Consideration
 

Party A acknowledges and agrees that as consideration for the Transferred Assets, the New Company shall make payment in the amount of RMB 283,980,000 in installments. The first installment of RMB 50,000,000 will be payable within 5 days of the signing of the assets transfer agreement; the remainder of the consideration (Remainder) will be payable in accordance with the transfer schedule in the assets transfer agreement.

Chapter 5 Financial Arrangement

	
                        5.1
 	
                        First Loan of Party B
 

In order to enable the New Company to pay for the Transferred Assets ,Party B shall extend to the New Company with a back-to-back loan  in the amount of RMB 50,000,000. The New Company shall use an amount of RMB 40,000,000 to pay the first installment of consideration

 

	
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for the Transferred Assets and the rest RMB 10,000,000 shall be used as the operation funds of the New Company. The terms of such loan agreement entered into by the New Company and Party B shall be confirmed by Party A.

	
                        5.2
 	
                        Further Loans of Party B and Service Agreement
 

	
                         
 	
                        5.2.1
 	
                        Within 12 months after the signing of the assets transfer agreement as described in Article 4.1.1, Party B shall further extend to the New Company back-to-back loans in the amount of RMB 144,570,000 in installments, Party B extend to the New Company RMB 199,470,000 in total, from which RMB 4,900,000 shall be the registered capital, and RMB 194,570,000 shall be the back-to-back loans. The New Company shall use RMB 156,100,000 of the RMB 194,570,000 in back-to-back loans as consideration for the Transferred Assets of Party A, and the remaining RMB 38,470,000 shall be used as the New Company’s operation funds.
 

	
                         
 	
                        5.2.2
 	
                        Party A acknowledges and agrees that one of the conditions for the provision of the above back-to-back loan of Party B to the New Company in accordance with Article 5.2.1 is that the New Company shall enter into an exclusive technology service agreement with Party B or other companies designated by Party B (Service Agreement). In accordance with the Service Agreement, the New Company shall only hire Party B or other companies designated by Party B to provide  exclusive technology service during the term of this Agreement. In accordance with the Service Agreement, the New Company shall pay 11% of its net profits  to Party B or other companies designated by Party B, as consideration for the exclusive technology services. Other specific terms of the Service Agreement shall be separately determined by the parties . The term of the Service
Agreement shall be 20 years and Party B shall enjoy a right of first refusal to extend the aforesaid term for another 10 years upon expiration.
 

	
                        5.3
 	
                        The Residual Amount of the Consideration for the Transferred Assets
 

After the New Company completes its payment obligation for the consideration of the Transferred Assets to Party A, in accordance with Article 5.2.1, Party A and Party B shall arrange for the payment of the residual amount of the consideration for the Transferred Assets in accordance with the relevant rules regarding the payment of consideration with regard to the transfer of state-owned assets.

 

	
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Chapter 6 Exclusive Cooperation Rights of Business

	
                        6.1
 	
                        Exclusive Cooperation Agreement
 

Upon the establishment of the New Company, Party A and the New Company shall  enter into an exclusive cooperation agreement (Exclusive Cooperation Agreement). The term of the Exclusive Cooperation Agreement shall be 20 years and the New Company shall enjoy a right of first refusal to extend the aforesaid term for another 10 years upon expiration.

	
                        6.2
 	
                        Cooperation Scope
 

Party A shall help the New Company to obtain all possible support and most-favored treatment with respect to the Business, including  exclusive operation with Party B to provide any services related to the Business  within the Exclusive Cooperation Area. 

	
                        6.3
 	
                        Exclusive
 

	
                         
 	
                        6.3.1
 	
                        Party A shall not, and shall ensure that its shareholders shall not, directly or indirectly (i) encourage or ask other individual or entity related to any business or services under the Exclusive Cooperation Agreement to address enquiries; (ii) accept such enquiries from the aforesaid individual or entity; (iii) communicate, negotiate with the aforesaid individual or entity; or (iv) provide the aforesaid individual or entity with information.
 

	
                         
 	
                        6.3.2
 	
                        Should Party A or its shareholders receive any invitation or other documents regarding entering into any cooperation agreement or similar cooperation in other forms from any 3rd parties, Party A shall promptly notify Party B. Party A shall ensure that its shareholders comply with Article 6.3.1 and be liable for any breach by its shareholders of Article 6.3.1.
 

Chapter 7 Representations and Warranties

	
                        7.1
 	
                        Joint Representations and Warranties
 

Each of the parties represents and warrants that:

	
                         
 	
                        7.1.1
 	
                        it has all necessary power and authority to execute, deliver and perform this Agreement and all Transaction Documents to which it is a party;
 

 

	
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                        7.1.2
 	
                        the execution and performance of this Agreement and any Transaction Documents to which it is a party have been duly and validly authorized by all necessary corporate action; and
 

	
                         
 	
                        7.1.3
 	
                        the execution, delivery and performance of this Agreement or any Transaction Documents to which it is a party will not contravene, conflict with, or result in a violation of any provision of its organizational documents or any contract, agreement, understanding, other legal arrangement, law or order to which it is subject. 
 

	
                        7.2
 	
                        Representations and Warranties of Party A
 

Party A further represents and warrants to Party B that:

	
                         
 	
                        7.2.1
 	
                        the Assets, Contributed Assets and Transferred Assets are free from any encumbrances;
 

	
                         
 	
                        7.2.2
 	
                        there is no lawsuit, third party claim, order or investigation pending against itself relating to Assets, Contributed Assets, Transferred Assets or Business by any third party, court, or governmental or arbitral body; and
 

	
                         
 	
                        7.2.3
 	
                        all agreements with third parties, including employees and customers, have at all times been honored completely and timely by itself;
 

	
                         
 	
                        7.2.4
 	
                        the Assets, Contributed Assets and Transferred Assets constitute all of the assets used in or necessary for the operation of the Business; and 
 

	
                         
 	
                        7.2.5
 	
                        all the consents, permissions, approval and registrations as required by PRC Law (Government Approvals, including those listed in Schedule VI) have obtained and such Government Approvals shall be valid. For the avoidance of doubt, Government Approvals shall include all the governmental requirements, including the registrations with the State Administration of Radio Film and TV, the State Administration for Industry and Commerce, the State-owned Assets Supervision and Administration Commission of the State Council, the Ministry of Finance, the State Administration of Taxation as well as their local arms.
 

	
                        7.3
 	
                        Independent Effect of Representations and Warranties
 

The representations and warranties shall be separate and independent and, save as expressly provided, shall not be limited by reference to

 

	
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any of the other representations and warranties or anything in this Agreement.

	
                        7.4
 	
                        Party A shall not be deemed to be in violation of  representations and warranties under Section 7.1 and Section 7.2 if there is no actual threat or damage to the signature of the Agreement or the New Company. If Party A effectively resolves or cures the breach, it shall not be in breach of the representations and warranties. If Party A fails to effectively resolve or cure the breach, it shall be considered in breach of the representations and warranties.
 

Chapter 8 Covenants

	
                        8.1
 	
                        Transferred Staff
 

In respect of rights of the Transferred Staff before the establishment of a formal employment relationship with the New Company, Party A shall:

	
                         
 	
                        8.1.1
 	
                        fully settle the severance payments with the Transferred Staff, as required by PRC Law;
 

	
                         
 	
                        8.1.2
 	
                        pay all required social insurance premiums  for the Transferred Staff in full and on time, or attend to all necessary procedures to obtain exemptions or waivers of such obligations from relevant government authorities and (or) the Transferred Staff to the extent necessary, to ensure that the Transferred Staff may be employed by the New Company;
 

	
                         
 	
                        8.1.3
 	
                        fully pay all wages, allowances, subsidies (including medical subsidies), bonuses or other outstanding payments or benefits to any of the Transferred Staff; and
 

	
                         
 	
                        8.1.4
 	
                        withhold, file and pay the individual income tax payable on wages, bonuses, allowances, subsidies, or other payments or benefits received in respect of the Transferred Staff.
 

	
                        8.2
 	
                        Business / Obligations related to New Company
 

At any time prior to Closing, Party A covenants that it shall not, without the prior written consent of Party B:

	
                         
 	
                        8.2.1
 	
                        create or permit to arise any lien, encumbrance, pledge, mortgage or any security or other third party right or interest on or in respect of any of the Assets, Contributed Assets and Transferred Assets or grant or issue or agree to grant or issue any guarantee;
 

 

	
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                        8.2.2
 	
                        enter into any transaction or arrangement with respect to the Assets, Contributed Assets and Transferred Assets;
 

	
                         
 	
                        8.2.3
 	
                        depart from the ordinary course of Party A or the New Company’s daily business operations in either of the following respects:
 

	
                         
 	
                        8.2.3.1
 	
                        enter into any agreements or materially modify or terminate any agreements related to the Business; and
 

	
                         
 	
                        8.2.3.2
 	
                        enter into any agreements relating to the Business signed after the date hereof where the value or consideration of the proposed agreement exceeds RMB 10,000 or has a term of more than 3 months.
 

	
                         
 	
                        8.2.4
 	
                        increase or agree to increase the remuneration (including bonuses, commissions and benefits in kind) of any of the members of the Board or employees of the New Company or provide or agree to provide any gratuitous payment or benefit to any such person or any of their dependents; and
 

	
                         
 	
                        8.2.5
 	
                        enter into any agreement or arrangement to, or grant any power of attorney or otherwise authorize any other person to do any of the above.
 

	
                        8.3
 	
                        Transactions
 

In respect of the transactions contemplated under this Agreement, Party A shall, at its own expense, obtain all consent, approval or authorization of, or declaration, filing or registration with, any governmental authority in connection with the execution, delivery and performance of this Agreement and any Transaction Documents to which it is a party.

	
                        8.4
 	
                        Government Approvals
 

Party A shall, using its own expenses, ensure annual inspection and/or the extension of the Government Authorization (if applicable) appropriately and on time, and ensure the validity of Government Authorization during the term of Exclusive Cooperation Agreement as prescribe by Article 6.1 as well as the term as the parties agree to extend.

 

 

	
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                        8.5
 	
                        Non-competition
 

After Closing, unless obtaining the prior consent of Part B, party A shall not, and shall ensure that its shareholders shall not  invest or manage any business directly or indirectly in competition with Business, or employ, engage or try to engage any Transferred Staff.

	
                        8.6
 	
                        Indemnification
 

Each party hereby unconditionally and irrevocably agrees to indemnify indefinitely the other party and its Affiliates and Subsidiaries and hold them harmless from and against all losses, claims, damages, expenses (including legal expenses) and liabilities which any of the other party and its Affiliates and Subsidiaries may sustain, suffer or incur in connection with the transactions contemplated under this Agreement and as a result of any breach of this Agreement.

	
                        8.7
 	
                        Notification by parties
 

	
                         
 	
                        8.7.1
 	
                        Party A shall forthwith notify Party B upon becoming aware of any event that may show, reveal or cause any of the warranties to be incorrect, untrue, misleading or breached in any material respect or that may have any material adverse effect on the assets or liabilities of Party A.
 

	
                         
 	
                        8.7.2
 	
                        Party B shall forthwith notify Party A upon it becoming aware of any event that may show, reveal or cause any warranties given by Party B hereunder as or to be incorrect, untrue, misleading or breached in any material respect.
 

Chapter 9 Conditions Precedent

	
                        9.1
 	
                        Conditions Precedent
 

Closing is subject to the satisfaction of all of the following conditions precedent:

	
                         
 	
                        9.1.1
 	
                        the execution and delivery of the Transaction Documents by all the parties thereto;
 

	
                         
 	
                        9.1.2
 	
                        the representations and warranties of Party A remaining true and accurate and being fully adhered to in all material respects at the time of Closing;
 

	
                         
 	
                        9.1.3
 	
                        the due completion of Party A’s covenants under Articles 2 and 3.3.2.
 

 

	
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                        9.2
 	
                        Satisfaction and Waiver of Conditions Precedent
 

	
                         
 	
                        9.2.1
 	
                        Within 3 business days after the satisfaction of the conditions precedent described in Article 9.1, Party A shall notify Party B. Within 3 business days after the issuance of the said notification, Party B shall confirm the same in writing to Party A. Closing shall then be arranged within 3 business days after receipt of Party B’s confirmation. 
 

	
                         
 	
                        9.2.2
 	
                        In the event that the conditions precedent set forth in Article 9.1 are not fulfilled (or waived as provided in Article 9.2.3) on or before 30 October, 2007, or such later date as the parties may agree, this Agreement (except Chapter 11, Articles 12.3 and 12.4) shall become null and void and be of no further effect whatsoever and all the obligations and liabilities of the parties hereunder shall cease and terminate (save for any antecedent breaches of this Agreement).
 

	
                         
 	
                        9.2.3
 	
                        One or more of the conditions precedent listed in Article 9.1 may be waived by Party B at its sole discretion by sending a notice in writing to Party A.
 

Chapter 10 Closing

	
                        10.1
 	
                        Closing
 

Subject to the conditions precedent having been fulfilled (or waived as provided in Article 9.2.3), Closing shall be held at the offices of TransAsia Lawyers Beijing Office (Suite 2218, China World Tower 1, No. 1 Jianguomenwai Avenue, Beijing, PRC) or at such other location as the parties shall agree. 

At Closing, to the extent not previously executed and delivered, the parties shall execute and deliver, and shall cause any of the other parties thereto to execute and deliver, the Transaction Documents.

	
                        10.2
 	
                        Payment of purchase price
 

Party B shall:

	
                         
 	
      10.2.1
 	
      upon closing, pay RMB 4,900,000 as  the initial capital contribution to the New Company upon Party A completing the Appraisal of the Transferred Assets in accordance with Article 3.3.3; 
 

	
                         
 	
      10.2.2
 	
      after establishment of the New Company, cause its Affiliate to provide the New Company back-to-back loans, in aggregate of RMB 50,000,000 in accordance with Article 5.1; and 
 

	
                         
 	
      10.2.3
 	
      within 12 months after Closing, pay RMB 144,570,000 in the
 

 

	
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form of back to back loans to the New Company in accordance with proper completion of obligation of Party A under Chapters 3 to 8.

After completion of the payments set forth above, Party B shall have fulfilled all of its obligations in relation to capital contribution and payments. For the avoidance of doubt, Party B shall have made capital contribution to the New Company as part of the New Company’s registered capital in the amount of RMB 4,900,000, and shall have provided to the New Company back-to-back loans in the aggregate amount of RMB 194,570,000. The New Company shall use RMB 156,100,000 of the total amount of the back-to-back loans to pay to Party A the consideration of the Transferred Assets, and shall use the remainder of the total amount (i.e., RMB 38,470,000) to finance the New Company’s daily business operations.

Chapter 11 Effective Date and Termination

	
                        11.1
 	
                        Effective Date
 

This Agreement shall be effective upon the date of its signing by the parties. 

	
                        11.2
 	
                        Termination
 

	
                         
 	
      11.2.1
 	
      This Agreement shall terminate with immediate effect if the parties cannot complete the negotiation and execution of the agreements necessary for the transactions contemplated under this Agreement above within 90 days after the execution hereof unless such period is extended by the parties, except for the loan agreements in relation to the loan arrangements in Article 5.3.1.
 

	
                         
 	
      11.2.2
 	
      This Agreement may be terminated with immediate effect by either party by means of written notice to the other parties under any of the following circumstances:
 

	
                         
 	
      11.2.2.1
 	
      where Closing has not occurred on or before 30 October 2007 provided, however, that the right to terminate this Agreement shall not be available to either party whose failure in any material respect to fulfill any obligation under this Agreement shall have been the cause of the failure for any condition precedent to Closing to be satisfied;
 

 

 

	
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                        11.2.2.2
 	
                        where the other party has committed a breach of this Agreement, as described in Article 12.1;
 

	
       
 	
                        11.2.2.3
 	
                        where the other party becomes insolvent, if an order is made or resolution passed for the administration, winding-up or dissolution of either party (otherwise than for the purposes of a solvent corporate reconstruction), if an administrative or other receiver, manager, liquidator, administrator, trustee or similar officer is appointed over all or a substantial part of the assets of such other party, or if such other party enters into or proposes any composition or arrangement with its creditors generally analogous to the foregoing; or
 

	
       
 	
                        11.2.2.4
 	
                        where Force Majeure prevails for a period of 30 days or more and has a material adverse effect on this Agreement.
 

	
                        11.3
 	
                        Consequence Upon Termination
 

Upon termination hereof, this Agreement shall be of no further effect and no party shall have any right against any of the other parties in connection with this Agreement; provided, however, that nothing herein shall relieve either party of any liability before the termination of this Agreement.

Chapter 12 Events of Breach

	
                        12.1
 	
                        Events of Breach
 

The occurrence of any 1 or more of the following events shall constitute a breach of this Agreement:

	
                         
 	
      12.1.1
 	
      either party has materially breached the terms hereof or has failed to perform in any material respect its obligations hereunder, and such breach or nonperformance has not been remedied for a period of 10 days after receipt of the other party’s written notice requesting such remedy; and
 

	
                         
 	
      12.1.2
 	
      any representation or warranty made by either party shall prove to have been false or misleading in any material respect.
 

 

	
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                        12.2
 	
                        Liabilities for Breach
 

Where either party commits a breach of this Agreement, it shall be liable to compensate the other party for any and all damages caused to it as a result of the breach, excluding indirect or consequential damages. 

Chapter 13 Force Majeure

	
                        13.1
 	
                        Consultation
 

In the event of Force Majeure, the parties shall promptly consult with each other to find a solution to the situation. 

	
                        13.2
 	
                        Relief from Obligations
 

Should the occurrence of a Force Majeure result in either party’s failure to perform its obligations under this Agreement in whole or in part, that party may, unless otherwise stipulated by law, be exempted from performing those obligations to the extent of the effect of the Force Majeure in question.

	
                        13.3
 	
                        Suspension of Performance
 

Subject to this Chapter 13, the party affected by Force Majeure may suspend the performance of its obligations under this Agreement to the extent and for the duration thereof until the effect of the Force Majeure no longer operates. However, that party shall exert its best efforts to remove any impediments resulting from the Force Majeure and to minimize to the greatest possible extent any damages incurred. With the agreement of the parties, the term of this Agreement shall be extended by the period of such suspension without penalty to either party.

	
                        13.4
 	
                        Written Evidence
 

The party claiming Force Majeure shall, as soon as possible after the occurrence of the Force Majeure, inform the other party of the situation and specify the reason for its failure to perform this Agreement, so as to minimize the damages inflicted upon that party, and shall provide the other party with written evidence, certified by the relevant government authority, of the occurrence of the Force Majeure.

	
      13.5
 	
  Non-Exemption
 

A party shall not be exempted from performing its obligations under this Agreement where Force Majeure occurs following the delay by that party to perform such obligations

 

	
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Chapter 14 Confidentiality

	
      14.1
 	
      Non-Disclosure
 

From the date hereof until 5 years hereafter, neither party shall disclose or communicate to any person, other than to their respective employees and affiliates for the sole purpose of implementing the agreements contemplated hereunder or as instructed by the other parties, any Trade Secret which may be within or may come into its knowledge.

	
      14.2
 	
      Breach of Obligations
 

The parties shall take all necessary measures (including the signing of confidentiality agreements) to ensure that their respective directors, employees, agents, contractors, suppliers and advisors also comply with the confidentiality obligations set forth in this chapter, and shall arrange for the summary dismissal without compensation of any such person who breaches these obligations.

	
      14.3
 	
      Exceptions
 

The disclosure of a Trade Secret by either party shall not be deemed to be in breach of this Chapter if any of the following circumstances apply:

	
                         
 	
      14.3.1
 	
      the information is in the public domain at the time of disclosure;
 

	
                         
 	
      14.3.2
 	
      the information is disclosed pursuant to the prior written agreement of the parties;
 

	
                         
 	
      14.3.3
 	
      the information is required by any government authority or law to which a party, or its affiliate is subject; or
 

	
                         
 	
      14.3.4
 	
      the information is provided to any director, employee, agent, contractor, supplier or advisor of an affiliate in the ordinary course of business pursuant to the prior written agreement of the parties.
 

Chapter 15 Miscellaneous

	
      15.1
 	
      Copies
 

 

	
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      15.1.1
 	
      This Agreement shall be executed in 2 sets of originals in the Chinese language, with 1 set of originals for each party.
 

	
                         
 	
      15.1.2
 	
      This Agreement may be executed in 1 or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same instrument. 
 

	
      15.2
 	
      Notice
 

All notices and communications between the parties shall be made in writing and in the Chinese language by fax, delivery in person (including courier service) or registered mail letter to the appropriate correspondence addresses set forth below:

If to Party A:

 

	
                        Address:
 	
                        No. 358, Huanghe 5th Road, Binzhou, PRC
 
	
                        Telephone:
 	
                        (86543)-2112703
 
	
                        Fax: 
 	
                        (86543)-2112320
 
	
                        Attention:
 	
                        Long Jiuzhan
 

If to Party B:

 

	
                        Address:
 	
                        Suite 2218, China World Tower 1, No. 1 Jianguomenwai Avenue, Beijing, PRC
 
	
                        Telephone:
 	
                        (8610) 65058188
 
	
                        Fax:
 	
                        (8610) 65058189
 
	
                        Attention:
 	
                        Ma Yong
 

The time of receipt of the notice or communication shall be deemed to be:

	
                         
 	
      15.2.1
 	
      if by fax, at the time displayed in the corresponding transmission record, unless such facsimile is sent after 5:00 p.m. or on a non-business day in the place where it is received, in which case the date of receipt shall be deemed to be the following business day;
 

	
                         
 	
      15.2.2
 	
      if in person (including courier service), on the date that the receiving party signs for the document; or
 

	
                         
 	
      15.2.3
 	
      if by registered mail (including express mail), 7 days after the issuance of a receipt by the post office.
 

 

	
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      15.3
 	
      Governing Law
 

The formation of this Agreement, its validity, interpretation, execution and settlement of disputes hereunder will be governed by PRC Law.

	
      15.4
 	
      Dispute Resolution
 

	
                         
 	
      15.4.1
 	
      If any dispute arises out of or in connection with this Agreement, the parties shall attempt in the first instance to resolve such dispute through friendly consultation or mediation.
 

	
                         
 	
      15.4.2
 	
      If the dispute cannot be resolved in the above manner within 30 days after the commencement of consultations, either party may submit the dispute to arbitration as follows:
 

	
                         
 	
                        15.4.2.1 
 	
                        All disputes arising out of, or in regard to this Agreement shall be submitted to China International Economic and Trade Arbitration Commission which shall be conducted by three (3) arbitrators in Beijing in accordance with the Commission’s arbitration rules;
 

	
                         
 	
                        15.4.2.2 
 	
                        The arbitration shall be conducted in the Chinese language, with the arbitral award being final and binding upon the Parties. The cost of arbitration shall be allocated upon the determination of the arbitrators. 
 

	
                         
 	
                        15.4.3
 	
                        When any dispute is submitted to arbitration, the parties shall continue to perform their obligations under this Agreement. Unless the disputes are related to the effectiveness or the termination of the Agreement.
 

	
      15.5
 	
      Waiver
 

No failure or delay on the part of either party in the exercise of any right hereunder shall impair such right or be construed to be a waiver of such right or acquiescence in any breach of any representation, warranty, covenant or agreement herein, nor shall any single or partial exercise or waiver of any such right preclude other or further exercise thereof or of any other right. 

	
      15.6
 	
      Prior Agreement
 

This Agreement supersedes all prior agreements, whether written or oral, between or among the parties with respect to its subject matter and along with the Transaction Documents and Supplemental

 

	
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Agreements, constitutes the entire agreement among the parties with respect to its subject matter. 

	
      15.7
 	
      Amendment
 

No amendment or other modification of this Agreement shall in any event be effective unless the same shall be in writing and signed by an authorized representative of each party hereto, and then such amendment or other modification shall be an integral part of, and have the same effectiveness as, this Agreement. 

	
      15.8
 	
      Assignment
 

No party may assign any of its rights and/or obligations under this Agreement without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of, the successors, heirs, personal representatives, executors and permitted assigns of the parties.

	
      15.9
 	
      Severability
 

Where any provision of this Agreement is subject to dispute or is determined by a competent court, arbitral body or government organization to be invalid or unenforceable, the remainder of this Agreement shall continue in full force and effect.

	
      15.10
 	
      Cost and Expense
 

Except as otherwise expressly set forth herein or in any related documents, all fees, costs and expenses incurred in connection with the negotiation, execution, delivery and performance of this Agreement and the Transaction Documents shall be paid by the party or parties incurring such fees, costs or expenses.

[The space below is intentionally left blank.]

 

	
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the date first above written.

Binzhou Broadcasting and Television Network Co., Ltd.

 

	
                         
 	
                         
 	
                         
 
	
                        By: 
 	
                        /s/ Yin Bingming  
 	
                         
 	
                         
 	
                         
 
	
                        Name:
 	
                         Yin Bingming
 	
                         
 	
                         
 	
                         
 
	
                        Title:
 	
                        Authorized Representative Company seal
 	
                         
 	
                         
 	
                         
 

Jinan Youxiantong Network Technology Co., Ltd.

 

	
                         
 	
                         
 	
                         
 
	
                        By: 
 	
                        /s/ Pu Yue 
 	
                         
 	
                         
 	
                         
 
	
                        Name:
 	
                         Pu Yue
 	
                         
 	
                         
 	
                         
 
	
                        Title:
 	
                        Authorized Representative Company seal:
 	
                         
 	
                         
 	
                         
 

 

 

	
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