Document:

exv10w1w5

Exhibit 10.1.5

Shares Issuance Agreement

April 8, 2008

Redgate Media Inc.

Redgate Interactive Advertising (Beijing) Co., Ltd.

()

and

Jinyu Fan ()

Juanjuan
Tang ()

      

SHARES ISSUANCE AGREEMENT

 

 

 

THIS SHARES ISSUANCE AGREEMENT (this “Agreement”) is made on April 8, 2008

Among

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

and

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

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

and

Jinyu Fan (in Chinese  the “Allottee”), citizen of the PRC, whose PRC identity card number
is 310104195808141612;

Juanjuan Tang (in Chinese  the “Allottee”), citizen of the PRC, whose PRC identity card
number is 310103195712232046;

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

Recitals:

	A.	 	The Company has agreed to allot and issue or procure the allotment and issuance of the Issued
Shares (as defined hereinafter) and effect the Cash Payment to the Allottee in consideration
of the provision of management services by the Allottee to Dianguang,

-2-

 

	 	 	and the giving of confidentiality undertaking and Non-Competition Undertaking by the Allottee
to the Company as set out herein;
	 
	B.	 	The obligations of the Company to allot and issue or procure the allotment and issuance of
the Issued Shares and effect the Cash Payment are subject to satisfaction or waiver of the
conditions precedent hereunder.

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

ARTICLE 1 DEFINITIONS

Section 1.1 Specific Definitions

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

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

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

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

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

-3-

 

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

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

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

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

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

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

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

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

-4-

 

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

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

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

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

“Shares” means the issued share capital of Listco.

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

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

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

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

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

-5-

 

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

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

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

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

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

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

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

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

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

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

-6-

 

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

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

“Dianguang”
means Shanghai DianGuangMeiTi Transmission Co., Ltd. ( ), a
company incorporated under the laws of the PRC.

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

Section 1.2 Other Terms

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

Section 1.3 General Interpretation

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

	(a)	 	(Articles, Sections, clauses, annexures and schedules) an Article, Section, clause, annexure
or schedule means a reference to a clause in or annexure or schedule to this Agreement;
	 
	(b)	 	(variations or replacement) a document (including this Agreement) includes any amendment,
variation or replacement of it;
	 
	(c)	 	(reference to statutes) a statute, ordinance, code or other law includes regulations and
other instruments under it and consolidations, amendments, re-enactments or replacements of
any of them;

-7-

 

	(d)	 	(law) means common law, principles of equity, and statutes;
	 
	(e)	 	(singular includes plural) the singular includes the plural and vice versa;
	 
	(f)	 	(person) the word “person” includes an individual, a firm, a corporation, a partnership, a
joint venture, an unincorporated body or association or any government agency;
	 
	(g)	 	(executors, administrators, successors) a particular person includes a reference to the
person’s executors, administrators, successors, substitutes (including persons taking by
novation) and assigns;
	 
	(h)	 	(two or more persons) an agreement, representation or warranty in favor of two or more
persons is for the benefit of them jointly and each of them individually;
	 
	(i)	 	(jointly and severally) an agreement, representation or warranty by two or more persons binds
them jointly and each of them individually;
	 
	(j)	 	(calculation of time) if a period of time dates from a given day or the day of an act or
event, it is to be calculated exclusive of that day;
	 
	(k)	 	(reference to a day) a day is to be interpreted as the period of time commencing at midnight
and ending 24 hours later on any Business Day;
	 
	(l)	 	(reference to a group of persons) a group of persons or things is a reference to any two or
more of them jointly and to each of them individually;
	 
	(m)	 	(meaning not limited) the words “include”, “including”, “for example” or “such as” are not
used as, nor is it to be interpreted as, a word of limitation and when introducing an example,
do not limit the meaning of the words to which the example relates to that example or examples
of a similar kind.

Section 1.4 Headings

-8-

 

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

ARTICLE 2 Issuance of the Issued Shares

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

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

Section 2.2 Determination of Consideration

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

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

	 	 	 	 	 	 	 
	 

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

	 	 	 
      
           B
	 	 

	 	Where:
	 
	 	X = 	 	 the number of the Tranche A Shares
	 
	 	A =  	 	the audited net profits of Dianguang for the year ended
31st December 2008 calculated in accordance with US GAAP (“Dianguang
2008 Net Profits”)
	 
	 	B =  	 	the average of the closing price per Share for the ten (10)
trading days after the announcement of Listco’s audited accounts for the
financial year ended 31st December 2008
	 
	 	C =  	 	P/E multiple used for IPO share pricing
	 
	 	D =  	 	60% (subject to the adjustments stated in Section 2.7)

-9-

 

	 	F = 	 	 Audit fee for years 2005 to 2008 US GAAP historical financial
report auditing
	 
	 	 provided that, the Company may elect at its sole discretion to pay cash or
procure the payment of cash to the Allottee in lieu of all or part of the Tranche A
Shares issuable to the Allottee under this Section 2.2(a)(i), in which case, the
amount of cash payable in lieu of Tranche A Shares shall be equal to the number of
Tranche A Shares for which the Company has elected to pay cash (in lieu of issuance
of Tranche A Shares) under this Section 2.2(a)(i) multiplied by B;

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

	 	 	 	 	 	 	 
	 
	 	X = 	 	A x C x 40% x D	 	 
	 
	 	 	 
B	 	 

	 	Where:
	 
	 	X = 	 	 the number of the Tranche B Shares
	 
	 	A =  	 	the audited net profits of Dianguang for the year end
31st December 2009 calculated in accordance with US GAAP (“Dianguang
2009 Net Profits”)
	 
	 	B =  	 	the average of the closing price per Share for the ten (10)
trading days after the announcement of Listco’s audited accounts for the
financial year ended 31st December 2009
	 
	 	C =  	 	the average of the daily forward price earnings ratio (P/E) of
Listco for the ten (10) trading days after the announcement of Listco’s audited
accounts for the financial year ended 31st December 2009 as shown on
the Nasdaq website (or if Listco is not listed on NASDAQ, then the same shall be
calculated in accordance with such other index as is reasonably determined by
the Board of Directors of Listco)
	 
	 	D =  	 	60% (subject to the adjustments stated in Section 2.7)
	 
	 	provided that, the Company may elect at its sole discretion to pay cash or
procure the payment of cash to the Allottee in lieu of all or part of the Tranche B
Shares issuable to the Allottee under this Section 2.2(a)(ii), in which case, the
amount of cash payable in lieu of Tranche B Shares shall be equal to the number of
Tranche B Shares for which the Company has elected to pay cash (in lieu of issuance
of Tranche B Shares) under this Section 2.2(a)(ii) multiplied by B;

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

-10-

 

	 	 	 	 	 	 	 
	 
	 	X = 	 	A x C x 20% x D	 	 
	 
	 	 	 
B
	 	 

	 	Where:
	 
	 	X = 	 	 the number of the Tranche C Shares
	 
	 	A =  	 	the audited net profits of Dianguang for the year end
31st December 2010 calculated in accordance with US GAAP (“Dianguang
2010 Net Profits”)
	 
	 	B = 	 	 the average of the closing price per Share for the ten (10)
trading days after the announcement of Listco’s audited accounts for the
financial year ended 31st December 2010
	 
	 	C =  	 	the average of the daily forward price earnings ratio (P/E) of
Listco for the ten (10) trading days after the announcement of Listco’s audited
accounts for the financial year ended 31st December 2010 as shown on
the Nasdaq website (or if Listco is not listed on NASDAQ, then the same shall be
calculated in accordance with such other index as is reasonably determined by
the Board of Directors of Listco)
	 
	 	D =  	 	60% (subject to the adjustments stated in Section 2.7)
	 
	 	provided that, the Company may elect at its sole discretion to pay cash or
procure the payment of cash to the Allottee in lieu of all or part of the Tranche C
Shares issuable to the Allottee under this Section 2.2(a)(iii), in which case, the
amount of cash payable in lieu of Tranche C Shares shall be equal to the number of
Tranche C Shares for which the Company has elected to pay cash (in lieu of issuance
of Tranche C Shares) under this Section 2.2(a)(iii) multiplied by B;

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

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

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

	 	Y =  	 	7 x A x 40% - F - Dianguang Equity Transfer Consideration
	 
	 	Where:

-11-

 

	 	Y =  	 	the amount of Tranche A Cash Payment
	 
	 	A = 	 	 the Dianguang 2008 Net Profits
	 
	 	F =  	 	Audit fee for years 2005 to 2008 historical financial report auditing

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

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

	 	 	 	 	 	 	 
	 
	 	X = 	 	A x C x 40% x D	 	 
	 
	 	 	 
B
	 	 

	 	Where:
	 
	 	X =  	 	the number of the Tranche B Shares
	 
	 	A = 	 	 the Dianguang 2009 Net Profits
	 
	 	B = 	 	 the average of the closing price per Share for the ten (10)
trading days after the announcement of Listco’s audited accounts for the
financial year ended 31st December 2009
	 
	 	C =  	 	P/E multiple used for Listco IPO share pricing
	 
	 	D =  	 	60% (subject to the adjustments stated in Section 2.7)
	 
	 	provided that, the Company may elect at its sole discretion to pay cash or
procure the payment of cash to the Allottee in lieu of all or part of the Tranche B
Shares issuable to the Allottee under this Section 2.2(b)(ii), in which case, the
amount of cash payable in lieu of Tranche B Shares shall be equal to the number of
Tranche B Shares for which the Company has elected to pay cash (in lieu of issuance
of Tranche B Shares) under this Section 2.2(b)(ii) multiplied by B;

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

	 	 	 	 	 	 
	 
	 	X = 	 	A x C x 20% x D
	 
	 	 	 
B
	 	 

	 	Where:
	 
	 	X =  	 	the number of the Tranche C Shares
	 
	 	A = 	 	 Dianguang 2010 Net Profits
	 
	 	B = 	 	 the average of the closing price per share of Listco for the
ten (10) trading days after the announcement of Listco’s audited accounts for
the financial year ended 31st December 2010

-12-

 

	 	C =  	 	the average of the daily forward price earnings ratio (P/E) of
Listco for the ten (10) trading days after the announcement of Listco’s audited
accounts for the financial year ended 31st December 2010 as shown on
the Nasdaq website (or if Listco is not listed on NASDAQ, then the same shall be
calculated in accordance with such other index as is reasonably determined by
the Board of Directors of Listco)
	 
	 	D = 	 	 60% (subject to the adjustments stated in Section 2.7)
	 
	 	provided that, the Company may elect at its sole discretion to pay cash or
procure the payment of cash to the Allottee in lieu of all or part of the Tranche C
Shares issuable to the Allottee under this Section 2.2(b)(iii), in which case, the
amount of cash payable in lieu of Tranche C Shares shall be equal to the number of
Tranche C Shares for which the Company has elected to pay cash (in lieu of issuance
of Tranche C Shares) under this Section 2.2(b)(iii) multiplied by B;

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

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

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

	 	Y = 	 	 7 x A x 40% - F - Dianguang Equity Transfer Consideration
	 
	 	Where:
	 
	 	Y = 	 	 the amount of Tranche A Cash Payment
	 
	 	A =  	 	the Dianguang 2008 Net Profits
	 
	 	F =  	 	Audit fee for years 2005 to 2007 historical financial report auditing

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

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

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

-13-

 

	 	Y = 	 	 7 x A x 40%
	 
	 	Where:
	 
	 	Y = 	 	 the amount of Tranche B Cash Payment
	 
	 	A =  	 	the Dianguang 2009 Net Profits

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

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

	 	 	 	 	 	 
	 
	 	X = 	 	A x C x 20% x D
	 
	 	 	 
B
	 	 

	 	 Where:
	 
	 	X =  	 	the number of the Tranche C Shares
	 
	 	A =  	 	Dianguang 2010 Net Profits
	 
	 	B = 	 	 the average of the closing price per Share for the ten (10)
trading days after the announcement of Listco’s audited accounts for the
financial year ended 31st December 2010
	 
	 	C = 	 	 P/E multiple used for IPO share pricing
	 
	 	D = 	 	 60% (subject to the adjustments stated in Section 2.7)
	 
	 	provided that, the Company may elect at its sole discretion to pay cash or
procure the payment of cash to the Allottee in lieu of all or part of the Tranche C
Shares issuable to the Allottee under this Section 2.2(c)(iii), in which case, the
amount of cash payable in lieu of Tranche C Shares shall be equal to the number of
Tranche C Shares for which the Company has elected to pay cash (in lieu of issuance
of Tranche C Shares) under this Section 2.2(c)(iii) multiplied by B;

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

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

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

-14-

 

	 	Y = 	 	 7 x A x 40% - F - Dianguang Equity Transfer Consideration
	 
	 	Where:
	 
	 	Y = 	 	 the amount of Tranche A Cash Payment
	 
	 	A =  	 	the Dianguang 2008 Net Profits
	 
	 	F = 	 	 Audit fee for years 2005 to 2008 historical financial report auditing

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

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

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

	 	Y = 	 	 7 x A x 40%
	 
	 	Where:
	 
	 	Y = 	 	 the amount of Tranche B Cash Payment
	 
	 	A = 	 	 the Dianguang 2009 Net Profits

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

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

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

	 	Y = 	 	 7 x A x 20%
	 
	 	Where:
	 
	 	Y =  	 	the amount of Tranche C Cash Payment
	 
	 	A = 	 	 the Dianguang 2010 Net Profits

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

-15-

 

Section 2.3 Consideration for the Issued Shares

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

Section 2.4 Conditions Precedent to the Tranche A Completion

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

	(a)	 	(Audit on Dianguang for the Year 2008) the financial statements of Dianguang for year 2008
have been audited in accordance with the US GAAP by an accounting firm designated by the
Company, provided that such audit shall occur and be completed within the first six (6)
calendar months of year 2009.
	 
	(b)	 	(Shareholders’ approval) if required by any stock exchange rules or the charter documents of
Listco, the shareholders of Listco have duly approved or consented to

-16-

 

	 	 	the issue of the Tranche A Shares or the Tranche A Cash Payment (as the case may be).
	 
	(c)	 	(Board approval) the board of directors of Listco has duly approved the issue of the Tranche
A Shares or the Tranche A Cash Payment (as the case may be).
	 
	(d)	 	(Governmental approvals) in case Listco shall issue the Tranche A Shares, and if required by
any applicable laws, the Allottee has obtained all necessary PRC governmental approvals
(including without limitation the approvals required by relevant regulations promulgated by
the State Administration for Foreign Exchange with respect to overseas investments by PRC
individuals or entities) for the acceptance of the Tranche A Shares and provided all such
approval documents to Listco.
	 
	(e)	 	(Completion of Equity Transfer) the equity transfer under the Equity Transfer Agreement has
been completed, as evidenced by the satisfaction of all the conditions precedent to the
completion set forth in the Equity Transfer Agreement, including without limitation, WFOE
Redgate (  ) being registered as the sole shareholder of Dianguang and the
representatives appointed by WFOE Redgate (  ) being registered as the directors and/or
legal representative of Dianguang in accordance with the Equity Transfer Agreement.
	 
	(f)	 	(Representations and Warranties) the representations and warranties of the Allottee under
Section 6.1 of this Agreement and the representations and warranties of the Allottee under
Article 3 and Schedule 3 of the Equity Transfer Agreement are true and correct as of the
Tranche A CP Completion Date in all material respects, and the Allottee has performed and
complied in all material respects with all obligations and covenants as required by this
Agreement and the Equity Transfer Agreement as of the Tranche A CP Completion Date.
	 
	(h)	 	(No breach) the Allottee has not breached any terms and conditions of this Agreement.
	 
	(i)	 	(Profits Target) the profits target of Dianguang for year 2008 set forth in Appendix 1 hereto
has been satisfied.
	 
	(j)	 	(Exclusive Advertising Sales Agency) the exclusive advertising sales agency agreements listed
in Appendix 2 hereto which have been entered into by Dianguang as of the date hereof with the
one (1) television program remain in full force and effect; provided that this condition may
be waived by the Company in writing if Dianguang has entered into other exclusive advertising
sales agency agreements with other television program such that Dianguang remains the sole and
exclusive advertising agent for at least one television program with the scale, terms and

-17-

 

	 	 	conditions of such agreements similar to the agreements listed in
Appendix 2 and are to the reasonable satisfaction of the Company.

Section 2.5  Conditions Precedent to the Tranche B Completion

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

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

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

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

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

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

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

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

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

(i) (Exclusive Advertising Sales Agency) the exclusive advertising sales agency agreements listed
in Appendix 2 hereto which have been entered into by Dianguang

-18-

 

as of the date hereof with the
one(4) television program remain in full force and effect; provided that this condition may be
waived by the Company in writing if Dianguang has entered into other exclusive advertising
sales agency agreements with other television program such that Dianguang remains the sole and
exclusive advertising agent for at least one television program with the scale, terms and
conditions of such agreements similar to the agreements listed in Appendix 2 and are otherwise
to the reasonable satisfaction of the Company.

Section 2.6 Conditions Precedent to the Tranche C Completion

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

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

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

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

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

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

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

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

-19-

 

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

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

Section 2.7 Adjustment of Consideration

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

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

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

For illustration purposes only,

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

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

Section 2.8 Reasonable Endeavors

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

-20-

 

Section 2.10 Issuance of Shares

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

ARTICLE 3 Completion

Section 3.1  Time and Place of Completion

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

Section 3.2 Allottee’s Obligations at Completion

	 	(a)	 	Unless otherwise waived in writing by the Company, on the Tranche A
Completion Date, the Allottee shall deliver to the Company satisfactory evidence that
WFOE Redgate (  ) has been registered as the sole shareholder of Dianguang and
the representatives appointed by WFOE Redgate (  ) has been registered as the
directors and/or legal representative of Dianguang in accordance with the Equity
Transfer Agreement, as well as other evidence that the conditions to be performed by
the Allottee on or before the Tranche A Completion as set forth in Section 2.4 of this
Agreement have been satisfied.
	 
	 	(b)	 	Unless otherwise waived in writing by the Company, on the Tranche B
Completion Date, the Allottee shall deliver to the Company satisfactory evidence
required by the Company showing the satisfaction of the conditions to be performed by
the Allottee before Tranche B Completion as set forth in Section 2.5 of this
Agreement.
	 
	 	(c)	 	Unless otherwise waived in writing by the Company, on the Tranche C
Completion Date, the Allottee shall deliver to the Company satisfactory

-21-

 

	 	 	 	evidence
required by the Company showing the satisfaction of the conditions to be performed by
the Allottee before Tranche C Completion as set forth in Section 2.6 of this
Agreement.

Section 3.3 Company’s Obligations at Completion

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

ARTICLE 4 Special Covenants

Section 4.1 Extension of financial facilities by the Company

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

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

Section 4.2 Covenants before Tranche C Completion

	 	(a)	 	Except as otherwise required by this Agreement or the Equity Transfer Agreement, no
resolution of the directors of Dianguang shall be passed, nor any contract or commitment
entered into, in each case, from the date hereof until the Tranche C Completion Date
without the prior written consent of the Company or WFOE
Redgate , except for (i) any board resolutions duly passed in the ordinary course
of business, and (ii) any contracts and commitments entered into in the ordinary course of
business and on arm’s length terms and conditions provided that the Company is notified of
the same in advance. As manager of Dianguang, the Allottee shall devote substantially all
his time to the business of Dianguang and manage the operation of Dianguang in good faith.

-22-

 

	 	(b)	 	The Allottee shall indemnify, defend and hold harmless the Company and its
Affiliates, officers, directors, agents and employees (each an “Indemnified Party”) from
and against all losses, damages, liabilities, claims, proceedings, costs and expenses
(including the fees, disbursements and other charges of counsel incurred by the
Indemnified Party in any action between the Allottee and the Indemnified Party or between
the Indemnified Party and any third party, in connection with any investigation or
evaluation of a claim or otherwise) resulting from or arising out of any breach by the
Allottee or Dianguang of any representation or warranty, covenant or agreement in this
Agreement or in the Equity Transfer Agreement.

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

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

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

Section 4.4 IPO

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

ARTICLE 5 Company’s Warranties

Section 5.1 Accuracy of Statements

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

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

-23-

 

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

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

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

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

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

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

Section 5.2 Separate Warranties

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

ARTICLE 6 Allottee’s Warranties

Section 6.1 Accuracy of Statements

The Allottee represents and warrants to the Company that each of the following statements is true
and accurate in all material respect as of the date of this agreement and as of the Tranche

-24-

 

A
Completion Date, Tranche B Completion Date and Tranche C Completion Date as if made on each of
those dates:

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

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

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

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

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

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

Section 6.2 Separate Warranties

-25-

 

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

Section 6.3 Agreement

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

ARTICLE 7 Confidentiality

Section 7.1 Disclosure of Confidential Information

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

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

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

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

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

ARTICLE 8 Announcements

Section 8.1 Public Announcements

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

Section 8.2 Public Announcements Required by Law

-26-

 

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

ARTICLE 9 Costs and Taxes

Section 9.1 Costs and Expenses

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

Section 9.2 Taxes

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

ARTICLE 10 Notices

Section 10.1 Form

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

Section 10.2 Notices

	(a)	 	Any notice or other communication shall be deemed to have been served or delivered if sent to
the address, or facsimile number (as the case may be) set out in this paragraph (a), the time
of such delivery or service shall be determined as follows:

	 	(i)	 	if by facsimile, at the time of dispatch to the relevant number; or

-27-

 

	 	(ii)	 	if by hand, at the time of delivery to the relevant address; or
	 
	 	(iii)	 	if by post, the second (2nd) Business Days after being put in the post
properly addressed to the relevant addressee with pre-paid postage,
	 
	 	provided that any notice or communication that is not dispatched on a Business Day shall be
deemed to have been dispatched on the immediately subsequent Business Day.

	(b)	 	For the purposes of this Agreement, the following addresses and facsimile numbers shall be
used for serving notices on the named Parties (unless the Party to be served shall have
notified the Party serving the notice in advance and in writing of any change(s) of the same):

ALLOTTEE:

Address: F/15, No.118 Qinghai Road, Shanghai,, China

Fax: 021-62179192

WFOE Redgate  (  ):

Attention: Zhu Ying

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

China

Fax: 010-85263129

Company:

Attention: Zhu Ying

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

Fax: (852) 8106 8655

ARTICLE 11 General Provisions

-28-

 

Section 11.1 Discretion in Exercising Rights

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

Section 11.2 Rights Cumulative

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

Section 11.3 Approvals and Consents

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

Section 11.4 Amendment and Waiver

Any term of this Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or prospectively),
only with the written consent of the Parties hereto and their permitted assigns and transferees.
Any amendment or waiver effected in accordance with this paragraph shall be binding upon the
parties hereto and their respective successors and assigns. No failure or delay by any Party in
exercising any right, power or remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of the same preclude any further exercise thereof or the
exercise of any other right, power or remedy. Without limiting the foregoing, no waiver by any
Party of any breach by the other Parties of any provision hereof shall be deemed to be a waiver of
any subsequent breach of that or any other provision hereof. If at any time any provision of this
Agreement is or
becomes illegal, invalid or unenforceable in any respect, the legality, validity and enforceability
of the remaining provisions of this Agreement shall not be affected or impaired thereby.

Section 11.5 Survival of Warranties

-29-

 

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

Section 11.6 Indemnities

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

Section 11.7 Entire Agreement

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

Section 11.8 Construction

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

ARTICLE 12 Governing Law and Dispute Resolution

Section 12.1 Governing law

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

Section 12.2 Dispute Resolution

	(a)	 	Any dispute, controversy or claim arising out of or relating to this Agreement, or the
interpretation, breach, termination or validity hereof, shall first be subject to resolution
through consultation of the Parties to such dispute, controversy or claim. Such consultation
shall begin within seven (7) days after one Party hereto has delivered to each of the other
Parties hereto a written request for such consultation. If such consultation can not resolve
the dispute or claim within thirty (30) days following the commencement of such consultation
(“Consultation Period”), then the Parties or their

-30-

 

	 	 	representatives, as the case may be, shall,
within thirty (30) days after the expiry of the Consultation Period to meet in person and
attempt to resolve the dispute or claim in good faith. If within thirty (30) days following
the commencement of such meeting the dispute cannot be resolved, the dispute shall be
submitted to arbitration upon the request of any Party with notice to the others.
	 
	(b)	 	The arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong
International Arbitration Centre (the “Centre”). There shall be a single arbitrator who shall
be agreed upon by the parties or, failing which, who shall be selected by the then President
of the Centre.
	 
	(c)	 	The arbitration proceedings shall be conducted in English. The arbitration tribunal shall
apply the UNCITRAL Arbitration Rules then in force as administrated by the Centre in effect at
the time of the arbitration.

ARTICLE 13 Counterparts

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

-31-

 

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

	 	 	 	 	 
	Redgate Media Inc.

 	 	 
	By  	/s/ Peter Bush Brack
 	 	 
	 	Name:  	Brack, Peter Bush 	 	 
	 	Title:  	Chairman & CEO 	 	 
	 

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

	 	 	 	 	 
	 	 	 
	By  	/s/ Zhu Ying
 	 	 
	 	Name:  	Zhu Ying 	 	 
	 	Title:  	Board Chairman 	 	 
	 

	 	 	 	 	 
	Allottee

Jinyu Fan

 	 	 
	By  	/s/ Jinyu Fan
 	 	 
	 	 	 	 
	 	 	 	 
	Juanjuan Tang

 	 
	By  	/s/ Juanjuan Tang
 	 	 
	 	 	 	 
	 	 	 	 
	 

-32-

 

Appendix 1

Profits Target

-33-

 

Enterprise Profit Forecast

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	RMB Yuan	 	 	 	 	 	Year 2008	 	Q1	 	Q2	 	Q3	 	Q4	 	Year 2009	 	Q1	 	Q2	 	Q3	 	Q4	 	Year 2010
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Main Operating Income (Please fill by channels)
	 	 	 	 	 	 	59,800,000	 	 	 	17,550,000	 	 	 	14,150,000	 	 	 	13,550,000	 	 	 	14,550,000	 	 	 	71,380,000	 	 	 	20,605,000	 	 	 	16,715,000	 	 	 	15,455,000	 	 	 	18,605,000	 	 	 	82,087,000	 
	New Entertainment Channel
	 	 	 	 	 	 	57,500,000	 	 	 	17,000,000	 	 	 	13,500,000	 	 	 	13,000,000	 	 	 	14,000,000	 	 	 	68,850,000	 	 	 	20,000,000	 	 	 	16,000,000	 	 	 	14,850,000	 	 	 	18,000,000	 	 	 	78,280,000	 
	Life and Fashion Channel
	 	 	 	 	 	 	1,500,000	 	 	 	350,000	 	 	 	450,000	 	 	 	350,000	 	 	 	350,000	 	 	 	1,650,000	 	 	 	385,000	 	 	 	495,000	 	 	 	385,000	 	 	 	385,000	 	 	 	2,807,000	 
	Other Channels
	 	 	 	 	 	 	800,000	 	 	 	200,000	 	 	 	200,000	 	 	 	200,000	 	 	 	200,000	 	 	 	880,000	 	 	 	220,000	 	 	 	220,000	 	 	 	220,000	 	 	 	220,000	 	 	 	1,000,000	 
	New Channels (could be added above this line)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Main Operating Costs
	 	 	 	 	 	 	32,180,000	 	 	 	8,020,000	 	 	 	8,120,000	 	 	 	8,020,000	 	 	 	8,020,000	 	 	 	38,375,000	 	 	 	9,565,000	 	 	 	9,680,000	 	 	 	9,565,000	 	 	 	9,565,000	 	 	 	44,131,250	 
	New Entertainment Channel
	 	 	 	 	 	 	30,000,000	 	 	 	7,500,000	 	 	 	7,500,000	 	 	 	7,500,000	 	 	 	7,500,000	 	 	 	36,000,000	 	 	 	9,000,000	 	 	 	9,000,000	 	 	 	9,000,000	 	 	 	9,000,000	 	 	 	41,400,000	 
	Life and Fashion Channel
	 	 	 	 	 	 	1,420,000	 	 	 	330,000	 	 	 	430,000	 	 	 	330,000	 	 	 	330,000	 	 	 	1,575,000	 	 	 	365,000	 	 	 	480,000	 	 	 	365,000	 	 	 	365,000	 	 	 	1,811,250	 
	Other Channels
	 	 	 	 	 	 	760,000	 	 	 	190,000	 	 	 	190,000	 	 	 	190,000	 	 	 	190,000	 	 	 	800,000	 	 	 	200,000	 	 	 	200,000	 	 	 	200,000	 	 	 	200,000	 	 	 	920,000	 
	New Channels (could be added above this line)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Business Tax
	 	 	9.45	%	 	 	2,610,090	 	 	 	900,585	 	 	 	569,835	 	 	 	522,585	 	 	 	617,085	 	 	 	3,118,973	 	 	 	1,043,280	 	 	 	664,808	 	 	 	556,605	 	 	 	854,280	 	 	 	3,586,818	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operating Profits
	 	 	 	 	 	 	25,009,910	 	 	 	8,629,415	 	 	 	5,460,165	 	 	 	5,007,415	 	 	 	5,912,915	 	 	 	29,886,028	 	 	 	9,996,720	 	 	 	6,370,193	 	 	 	5,333,395	 	 	 	8,185,720	 	 	 	34,368,932	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operating and Administration Expenses
	 	 	 	 	 	 	9,015,675	 	 	 	2,582,419	 	 	 	2,110,419	 	 	 	2,171,419	 	 	 	2,151,419	 	 	 	10,124,455	 	 	 	2,875,114	 	 	 	2,355,114	 	 	 	2,350,114	 	 	 	2,544,114	 	 	 	11,493,801	 
	Rent + Property Management Fees
	 	 	 	 	 	 	388,000	 	 	 	97,000	 	 	 	97,000	 	 	 	97,000	 	 	 	97,000	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Water & Electricity Fees
	 	 	 	 	 	 	26,000	 	 	 	7,000	 	 	 	6,000	 	 	 	7,000	 	 	 	6,000	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Staff Salaries (Please fill in the staff budget table)
	 	 	 	 	 	 	1,514,500	 	 	 	378,625	 	 	 	378,625	 	 	 	378,625	 	 	 	378,625	 	 	 	1,831,700	 	 	 	457,925	 	 	 	457,925	 	 	 	457,925	 	 	 	457,925	 	 	 	2,000,000	 
	Individual Income Tax (Please fill in a average proportion)
	 	 	15.00	%	 	 	227,175	 	 	 	56,794	 	 	 	56,794	 	 	 	56,794	 	 	 	56,794	 	 	 	274,755	 	 	 	68,689	 	 	 	68,689	 	 	 	68,689	 	 	 	68,689	 	 	 	300,000	 

-34-

 

Enterprise Profit Forecast (cont’d)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	RMB Yuan	 	 	 	 	 	Year 2008	 	Q1	 	Q2	 	Q3	 	Q4	 	Year 2009	 	Q1	 	Q2	 	Q3	 	Q4	 	Year 2010
	Travelling Expenses
	 	 	 	 	 	 	100,000	 	 	 	25,000	 	 	 	25,000	 	 	 	25,000	 	 	 	25,000	 	 	 	100,000	 	 	 	25,000	 	 	 	25,000	 	 	 	25,000	 	 	 	25,000	 	 	 	120,000	 
	Business Entertainment Fees
	 	 	 	 	 	 	360,000	 	 	 	90,000	 	 	 	90,000	 	 	 	90,000	 	 	 	90,000	 	 	 	360,000	 	 	 	90,000	 	 	 	90,000	 	 	 	90,000	 	 	 	90,000	 	 	 	400,000	 
	Telephone Charges, Internet Fees
	 	 	 	 	 	 	25,000	 	 	 	13,750	 	 	 	3,750	 	 	 	3,750	 	 	 	3,750	 	 	 	25,000	 	 	 	13,750	 	 	 	3,750	 	 	 	3,750	 	 	 	3,750	 	 	 	30,000	 
	Office Expenses
	 	 	 	 	 	 	30,000	 	 	 	8,000	 	 	 	7,000	 	 	 	7,000	 	 	 	8,000	 	 	 	30,000	 	 	 	8,000	 	 	 	7,000	 	 	 	8,000	 	 	 	7,000	 	 	 	40,000	 
	Commission
	 	 	10.00	%	 	 	5,980,000	 	 	 	1,755,000	 	 	 	1,415,000	 	 	 	1,355,000	 	 	 	1,455,000	 	 	 	7,138,000	 	 	 	2,060,500	 	 	 	1,671,500	 	 	 	1,545,500	 	 	 	1,860,500	 	 	 	8,208,700	 
	Data Charges
	 	 	 	 	 	 	220,000	 	 	 	110,000	 	 	 	 	 	 	 	110,000	 	 	 	 	 	 	 	220,000	 	 	 	110,000	 	 	 	 	 	 	 	110,000	 	 	 	 	 	 	 	250,000	 
	Expressage
	 	 	 	 	 	 	5,000	 	 	 	1,250	 	 	 	1,250	 	 	 	1,250	 	 	 	1,250	 	 	 	5,000	 	 	 	1,250	 	 	 	1,250	 	 	 	1,250	 	 	 	1,250	 	 	 	5,000	 
	Others
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(Any major costs not listed in the table could be added above this line.)
	 	 	 	 	 	 	140,000	 	 	 	40,000	 	 	 	30,000	 	 	 	40,000	 	 	 	30,000	 	 	 	140,000	 	 	 	40,000	 	 	 	30,000	 	 	 	40,000	 	 	 	30,000	 	 	 	140,101	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Financial Expenses
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total Profits
	 	 	 	 	 	 	15,994,235	 	 	 	6,046,996	 	 	 	3,349,746	 	 	 	2,835,996	 	 	 	3,761,496	 	 	 	19,761,573	 	 	 	7,121,606	 	 	 	4,015,079	 	 	 	2,983,281	 	 	 	5,641,606	 	 	 	22,875,131	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Income Tax
	 	 	25.00	%	 	 	3,998,559	 	 	 	1,511,749	 	 	 	837,437	 	 	 	708,999	 	 	 	940,374	 	 	 	4,940,393	 	 	 	1,780,402	 	 	 	1,003,770	 	 	 	745,820	 	 	 	1,410,402	 	 	 	5,718,783	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net Profits
	 	 	 	 	 	 	11,995,676	 	 	 	4,535,247	 	 	 	2,512,310	 	 	 	2,126,997	 	 	 	2,821,122	 	 	 	14,821,179	 	 	 	5,341,205	 	 	 	3,011,309	 	 	 	2,237,461	 	 	 	4,231,205	 	 	 	17,156,348	 
	 
	 	 	 	 	 	 	20.1	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	20.8	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	20.9	%

-35-

 

Appendix 2

Exclusive Advertising Sales Agency Agreements

-36-

 

Shanghai Media Group

Contract for Advertising Placement 2008

No.: C001

Party A: Shanghai Media Group & Advertisement Center (hereinafter referred to Party A)

Party B: Shanghai Dianguang Media Transmission Co., Ltd (hereinafter referred to Party B)

Whereas,

The Contract has been declared expressly to the Parties; and, the Parties have acknowledged and
confirmed expressly as follows:

	1.	 	Shanghai Media Group and the Advertisement Center of Shanghai Media Group are Party A to the
Contract. Advertisement Center is the organization authorized by Shanghai Media Group to take
charge of management and operation of the placement of its media advertisements and to
exercise the rights and perform the obligations under the Contract;
	 
	2.	 	Shanghai Dianguang Media Transmission Co., Ltd. is Party B to the Contract. Party B is an
advertising operator duly incorporated within the People’s Republic of China and permitted to
engage in placement of media advertisements with the registration with and approval by the
administration for industry and commerce. Party B warrants that it has the qualifications and
abilities to exercise the rights and perform the obligations under the Contract independently;
and
	 
	3.	 	The Parties are willing to develop advertisement business on TV through amiable cooperation.

NOW, THEREFORE, the Contract is hereby made by and between the Parties through negotiation in
connection with Party B’s placement of advertisements on the television channels of Shanghai Media
Group on the principles of good faith, amicable cooperation and mutual benefit and in accordance
with the Contract Law of the People’s Republic of China, the Advertising Law of the People’s
Republic of China and other applicable laws and regulations. It is agreed as follows:

Article 1 Definitions

Unless otherwise stipulated in the context, the following words and expressions used in the
Contract shall have the meanings as follows:

	1.	 	Contract Value

“Contract Value” as mentioned in the Contract means the amount to be paid to Party A according to
Article 4.1 hereof;

	2.	 	Error

“Error” as mentioned in the Contract means Party A’s errors made during the broadcasting of Party
B’s advertisements, such as editions, dates, periods of time and channels;

	3.	 	Omission

“Omission” as mentioned in the Contract means failure to broadcast the advertisements ordered by
Party B.

-37-

 

Article 2 Term of the Contract

The term of the Contract is from January 1, 2008 to December 31, 2008.

Article 3 Subject Matter

	3.1	 	Party B shall purchase from Party A the ad-agency operation right to the advertising slot
during New Entertainment Cinema of News & Entertainment Channel in 2008,
12-minute display advertisements per stage, and 366 stages per year in total.
	 
	3.2	 	The ad-agency operation right granted to Party B shall be limited to the advertising slot
hereunder, excluding the rights and interests to non-routine advertisements such as title
sponsorship, special advertisements for sponsors, producers’ advertisements, standard version
and information advertisement column, as well as other associated rights thereto.

Article 4 Contract Value, Performance Bond and Payment Method

	4.1	 	Contract Value for the ad-operation right purchased by Party B hereunder is
RMB30,000,000 (RMB thirty million only).
	 
	4.2	 	Party B must pay the Contract Value on schedule as follows:

January 2008: RMB two million four hundred thousand only;

February 2008: RMB two million four hundred thousand only;

March 2008: RMB two million four hundred thousand only;

April 2008: RMB two million four hundred thousand only;

May 2008: RMB two million four hundred thousand only;

June 2008: RMB two million four hundred thousand only;

July 2008: RMB two million four hundred thousand only;

August 2008: RMB two million four hundred thousand only;

September 2008: RMB two million four hundred thousand only;

October 2008: RMB two million four hundred thousand only;

November 2008: RMB three million only;

December 2008:
RMB three million only.

Note: Payment shall be made on or prior to the 25th day of relevant month. The
performance bond paid separately by Party B will and may be used to offset the Contract Value
payable by Party B in the last two months within the term of the Contract.

	4.3	 	Party B must, within one week from the date of the Contract, pay RMB six million only
to Party A as the performance bond for purchase of the ad-agency right hereunder. Party B’s
failure to pay in full the performance bond on the lump-sum basis timely shall entitle Party A
to rescind the Contract immediately.
	 
	4.4	 	Party B agrees that Party A may deduct advertising costs, penalty and compensations as
mentioned

-38-

 

	 	 	in Article 6 hereof and any other outstanding amount directly from the performance bond. Party
B shall make up the balance of the performance bond within 10 days after Party A makes the
aforesaid deduction. Party B’s failure to make up the balance on schedule shall entitle Party A
to take measures according to Article 6.3 hereof.

	4.5	 	Party B’s failure to pay the Contract Value in full shall entitle Party A to deduct the
outstanding part of the Contract Value from the performance bond. Where the performance bond
is insufficient to deduct the outstanding part of the Contract Value, Party A shall be
entitled to further recourse against Party B.

Article 5 Rights and Obligations of the Parties

	5.1	 	Party A shall have the right to examine Party B’s qualifications prior to the execution of
the Contract. Party B shall be obliged to provide relevant information to Party A truthfully
in accordance with pertinent regulations, and shall be responsible for the authenticity of
such information.
	 
	5.2	 	With Party A’s written permit, Party B may exercise its rights as to the projects to which it
has the agency operation right on the principles of self-promotion, self-pricing and
self-operation. Party B shall render cooperation where Party A has certain particular
requirements for broadcasting relevant brand advertisements in accordance with pertinent laws,
regulations and policies, the demands for public opinion management or for the purpose of
stability and maintenance of the market order.
	 
	5.3	 	Party B undertakes that it shall not conduct operation activities by means of warranty of
cost per rating point (CPRP) to its clients during agency operation hereunder in 2008, and
shall maintain the stability of the pricing structure.
	 
	5.4	 	During performance of the Contract, the Parties shall negotiate about the length and period
of the advertisement actually placed by means of a placement order. Party B’s orders shall, in
principle, be the originals bearing the signatures of Party B’s salesmen and the seal of Party
B’s company; Party B shall provide the list of its salesmen to Party A for confirmation and
record filing. Where Party B places an order by fax, besides the said two factors of the
original, the facsimile document shall indicate the electrograph number and the time of
transmission. An order shall become valid after being confirmed by Party A’s salesman with
signature and seal.
	 
	5.5	 	Daily or terminal broadcasting under the Contract shall be subject to the program play-out
schedule of the airdate agreed upon by the Parties. Where Party B fails to provide the
advertising layout, or the broadcasting time as mentioned in the advertising layout provided
conflicts with the daily or terminal ad-operation time provided by Party A to Party B
according to the Contract, Party B shall be deemed as having exercised completely the daily or
terminal ad-operation right according to the Contract.
	 
	5.6	 	The advertising materials provided by Party B must comply with the Advertising Law of the
People’s Republic of China and other pertinent laws and regulations and be free from
infringement of a third person’s prior right. Party B shall produce relevant certifications
and approvals issued by relevant functional authorities to Party A. Medical treatment
advertisements must be subject to the examination and approval of the competent authority of
Shanghai. Party B agrees to strictly abide by the pertinent regulations of the competent
authorities on broadcasting of TV advertisements and the Advertising Placement Instructions
formulated by Party A; otherwise, Party A shall have the right to refuse broadcasting, and all
losses arising therefrom shall be undertaken by Party B. After the advertisements are
broadcast, Party B shall be fully responsible for all economic or legal liabilities as a
result of political mistakes or violation of pertinent regulations. Party A’s examination
shall not result in its liabilities for the validity and authenticity of the advertisement
contents or for potential consequences.
	 
	5.7	 	Party A has the right to examine the demos provided by Party B in such aspects as contents,
presentation format and technical standards. Where the contents or presentation formats are
incompliant with laws, regulations and rules, or the demos are not up to the technical
standards, Party A has the right to demand Party B to make correction and refuse to broadcast
until Party B

-39-

 

	 	 	makes such correction; in such case, Party B shall be responsible for all losses arising
therefrom.

	5.8	 	Advertisement tapes and Advertising Placement Orders must be served on Party A ten (10) days
prior to the airdate. In case of any delay in broadcasting due to overdue service, the
liabilities arising therefrom shall be undertaken by Party B. Advertisement tapes shall be
consistent with the demos provided by Party B and approved by Party A, as well as the edition
of the Advertising Placement Orders; otherwise, the liabilities arising therefrom shall be
undertaken by Party B. Tape numbers shall be applied for the advertisements to be broadcast.
An Advertising Placement Order shall not only contain the edition number or brand but also
contain the tape number, and shall be subject to the tape number. Party A shall have the right
to refuse to broadcast the advertisement of which the order contains brand or edition number
but no tape number, and the liabilities arising therefrom shall be undertaken by Party B.
	 
	5.9	 	Where Party B intends to change or cancel a certain advertising order, it shall obtain Party
A’s consent and, seven (7) working days prior to the airdate, issue to Party A a written
notice bearing its signature and seal, which shall be approved by Party A in writing. In case
of a notice to Party A four (4) working days prior to the airdate, Party B shall pay to Party
A the commission charge at 20% of the value of the changed or cancelled part. Change or
cancellation of orders three (3) working days prior to the airdate shall be prohibited.
	 
	5.10	 	In case of objections to the advertisement broadcast, Party B shall, within fifteen (15)
working days from the agreed airdate, put them forward in writing to Party A and produce the
written information and relevant advertisement detecting materials issued by the authoritative
detecting company recognized by the Parties. Where Party B makes no written objections to
Party A within fifteen (15) working days from the agreed airdate, the broadcasting shall be
deemed as accurate and valid. Party A shall, at Party B’s request, issue a broadcasting
certification within thirty (30) days from the airdate.
	 
	5.11	 	Party B shall make payment on schedule. Party B may not request for reduction of the total
Contract Value by reason of insufficient amount of advertisings solicited or other reasons
whatsoever.
	 
	5.12	 	Party B shall undertake to place its advertisements according to the contents, periods and
schedules specified in the Contract; otherwise, no advertisements may be broadcast further if
they are overdue.
	 
	5.13	 	During performance of the Ad-operation Agency Contract, Party B shall be fully and solely
responsible for any and all claims, debts or other economic disputes due to reason
attributable to Party B or its clients, or for lawsuits and disputes arising after the
advertisings are broadcast.
	 
	5.14	 	Party B shall notify Party A in writing, together with relevant materials, in case of equity
changes, disposal of major assets, legal lawsuits or relevant economic activities such as
important project cooperation, mortgages and loans during the ad-operation agency period.
Where Party B fails to perform the obligation to inform, Party A reserves the right to pursue
its liabilities.

Article 6 Liability for Breach of Contract

	6.1	 	Party B agrees that, in case of violation of any of the aforesaid clauses, Party B shall
notify Party A immediately and take proper remedies in time. In such case, Party B shall be
responsible for relevant losses, liabilities, obligations and expenditures, as well as
liability for breach of contract, and Party A shall have the right to rescind the Contract
immediately.
	 
	6.2	 	Neither party may modify or rescind the Contract as of the effective date of the Contract.
Unless otherwise stipulated by laws and the Contract, rescission of and modification to the
Contract shall be subject to the negotiation between the Parties and specified in a
supplemental agreement in accordance with laws; otherwise, it shall be deemed as breach of
contract, and the non-breaching party shall not only require the breaching party to perform
the Contract continually but also claim for 20% of the contract amount in respect of the
unperformed part as liquidated damages.

-40-

 

	6.3	 	Party B shall make payment on schedule. In case of overdue payment, Party A shall have the
right to cease broadcasting Party B’s advertisements, or even rescind the Contract without
refunding the performance bond paid by Party B; in addition, Party A shall have the right to
claim against Party B for the penalty of overdue payment at the daily
rate of 0.5‰ of the
total outstanding amount until Party B pays off the amount due and payable. Where Party B
fails to makes payment within 30 days, in addition to such penalty, Party B shall pay the
damages to Party A at 20% of the outstanding amount.
	 
	6.4	 	Where Party B breaches Article 5.3 hereof, it shall assume the liability for breach of
contract, and Party A shall have the right to confiscate the performance bond and rescind the
Contract immediately.
	 
	6.5	 	Party A shall broadcast Party B’s advertisings on schedule. In case of Errors or Omissions,
Party A shall take remedies on the principles of “Once for Each Error” or “Twice for Each
Omission”, and the period of time shall be subject to Party A’s arrangement according to the
program schedule. However, In case of adjustments of the program concerned, time or channel of
the program as a result of changes in relevant programs on the TV channels of Shanghai Media
Group, instructions from higher authorities, machine troubles or other reasons whatsoever,
which results in the fact that certain advertisements cannot be broadcast or the
advertisements broadcast actually conflict with the orders, such circumstances shall not be
deemed as Errors or Omissions.

Article 7 Independence

	7.1	 	Each party hereto is an independent contracting party. No relationship such as joint venture,
partnership or employment has been created between the Parties. Neither party nor its
employees and agents may, or attempt to, conduct business in the name of the other party’s
partner, representative or employee, or make relevant statements expressly or impliedly.
	 
	7.2	 	Without Party A’s written consent, Party B may not make any publicity in the name of Party
A’s program partner or sponsor, or use the name, logo or other marks of Party A or Shanghai
Media Group.

Article 8 Effect of the Contract

	8.1	 	The Contract constitutes the entire agreement between the Parties concerning the subject
matter hereof and substitutes all prior written or oral summaries, memos, contracts,
agreements and negotiations between the Parties concerning the same subject matter.
	 
	8.2	 	Without Party A’s written consent, Party B may not transfer the Contract or any of its rights
or obligations under the Contract; otherwise, Party A shall have the right to confiscate the
performance bond and rescind the Contract immediately.
	 
	8.3	 	The following documents shall have the same legal force with the Contract:

	 	1)	 	Advertising Placement Order;
	 
	 	2)	 	Advertising Quotation 2008 publicized recently by Party A (in case of changes, subject
to the quotation publicized by Party A then); and
	 
	 	3)	 	Advertising Placement Instructions.

Article 9 Force Majeure

Where either party cannot perform the Contract continually as a result of earthquake, typhoon,
flood, fire,

-41-

 

instructions from Party A’s higher authorities and other force majeure events, the Contract shall
be terminated and neither party shall assume the liability for breach of contract. However, the
affected party shall inform the other party in time after occurrence of such event.

Article 10 Dispute Settlement

Any dispute arising between the Parties during the performance of the Contract shall be settled
through amiable negotiation. Where such negotiation fails, the Parties agree to submit the dispute
to the jurisdiction of the People’s Court at the place where the Contract is performed.

Article 11 Effectiveness

	11.1	 	The Contract shall be written in Chinese in four copies with the same legal force, two for
each party.
	 
	11.2	 	The Contract takes effect with the signatures and seals of the Parties.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Party A: Shanghai Media Group &
Advertisement Center	 	 	 	 Party B: Shanghai Dianguang Media
Transmission Co., Ltd.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Signature: 	 	/s/ Zhong Lin Jin	 	 	 	Signature: 	 	/s/ Juanjuan Tang	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date:

	 	December 24, 2007
	 	 	 	Date:
	 	December 21, 2007	 	 

-42-

 

Cooperation Agreement

Concerning

Advertising Placement on Channel Young of Shanghai Media Group 

2008

By and between

Shanghai Fashion Cultural Media Co., Ltd.

and

Shanghai Dianguang Media Transmission Co., Ltd.

January 2008

-43-

 

Party A: Shanghai Fashion Culture Media Co., Ltd.

Add.: 2000 Dongfang Rd., Pudong, 200125, Shanghai, China

Tel: 58812000

Party B: Shanghai Dianguang Media Transmission Co., Ltd.

Add.: No. 15 Building, 118 Qinghai Rd., 200041, Shanghai, China

Tel: 021-62178783

The Agreement is hereby made by and between the Parties through negotiation in connection with the
placement of advertisings concerning such brands as Mentholatum, Palladium
Association, BlueVase and KIA for which Party B acts as the agent on the Channel Young of
Shanghai TV Stationowned by Shanghai Fashion Cultural Media Co., Ltd. in 2007 on the principles of
good faith, amiable cooperation and mutual benefit and in accordance with the Contract Law of the
People’s Republic of China and the Advertising Law of the People’s Republic of China. It is agreed
as follows:

I. Term of the Contract

The term of the Contract is from January 1, 2008 to December 31, 2008.

II. Paid-up Amount for Advertising Placement, Agency Discount and Reward

2.1 For the purpose of the Contract, “Paid-up Amount for Advertising Placement” means, to the
extent of the Contract, the amount of the ad-broadcasting fee paid for the advertisements actually
placed by Party B (excluding the advertising placement fee in respect of all preferential
treatments and rewards enjoyed by Party B and irrelevant to the Contract, performance bond paid by
Party B out of the Contract and other amounts). Within the term of the Contract, advertisements
concerning such brands as Mentholatum, Palladium Association, BlueVase and KIA
for which Party B acts as the agent may be placed on the Channel Young of Shanghai TV Station
during the advertising slots other than those licensed to other companies according to the
advertising quotations 2008 publicized recently by Party A (in case of changes, subject to the
quotation publicized by Party A then).

2.2 Agency Discount: Party B undertakes that the Paid-up Amount for Advertising Placement (Paid-up
Amount) accumulatively under the Contract as to such brands within the term hereof shall not be
less than RMB5,000,000 (namely, RMB five million only) (inclusive), and that the discount available
to Party B for advertising placement under the Contract shall be 54% (namely, advertising quotation
×46%).

2.3 Advertisements concerning such brands as Mentholatum, Palladium Association,
BlueVase and KIA for which Party B acts as the agent may enjoy any of the advertising placement
packages promoted by Party A in 2008, as well as the agency discount agreed herein.

III. Performance Bond and Payment Method

Party B shall, within one (1) week after signing the Contract, pay Party A RMB500,000 (RMB five
hundred thousand only) as the performance bond for advertisement broadcasting. The value of each
order shall be settled according to this formula: discount as mentioned in Article 2 hereof ×
advertising quotation. Meanwhile, Party B is required to settle the ad-broadcasting fee as to each
order within one (1) week after completion of the order, and settle the Contract Value incurred
during the year prior to December 25, 2008. After the Contract is fully performed, the performance
bond may be used to offset (without interest) relevant advertising cost with Party A’s confirmation
at the end of 2008. Party A shall issue relevant advertisement invoices to Party B within one (1)
week after receiving such amount.

Party A’s bank account information:

Name: Shanghai Fashion Cultural Media Co., Ltd. A/C.: 1001207409014449459

-44-

 

Bank: Industrial & Commercial Bank of China, Shanghai Jing’an Sub-branch

IV. Rights and Obligations of the Parties

4.1 Party A shall have the right to examine Party B’s qualifications prior to the execution of the
Contract. Party B shall be obliged to provide relevant information to Party A truthfully in
accordance with pertinent regulations and shall be responsible for the authenticity of such
information. Party B shall also ensure that it has the ad-agency operation qualification during the
performance of the Contract; otherwise, Party A shall have the right to terminate the Contract in
advance.

4.2 During the performance of the Contract, the Parties shall negotiate about the length and period
of the advertisement actually placed by means of a placement order. Party B’s orders shall, in
principle, be the originals bearing the signatures of Party B’s salesmen and the seal of Party B’s
company; Party B shall provide the list of its salesmen to Party A for confirmation and record
filing. Where Party B places an order by fax, besides the said two factors of the original, the
facsimile document shall indicate the electrograph number and the time of transmission. An order
shall become valid after being confirmed by Party A’s salesman with signature and seal.

4.3 Advertisement materials provided by Party B must comply with the Advertising Law of the
People’s Republic of China and other pertinent laws and regulations and produce the certifications
and approvals issued by relevant functional authorities, and the advertisements shall be approved
by the Advertising Association; otherwise, Party A shall have the right to refuse broadcasting. In
such case, Party B shall be responsible for any dispute or any and all losses to or adverse impacts
on Party A arising from the validity of the advertisements, including, but not limited to, attorney
fee and legal cost.

4.4 Party B shall provide Party A with the advertisement demos thirty (30) days prior to the
airdate. Party A shall have the right to examine the demos provided by Party B in such aspects as
contents, presentation format and technical standards. Where the contents or presentation formats
are incompliant with laws, regulations and rules, or the demos are not up to the technical
standards, Party A shall have the right to demand Party B to make correction and refuse to
broadcast until Party B makes such correction; in such case, Party B shall be responsible for all
losses arising therefrom.

4.5 Advertisement tapes and Advertising Placement Orders must be served on Party A ten (10) days
prior to the airdate. In case of any delays in broadcasting due to overdue service, the liabilities
arising therefrom shall be undertaken by Party B. Advertisement tapes shall be consistent with the
demos provided by Party B and approved by Party A, as well as the edition of the Advertising
Placement Orders; otherwise, the liabilities arising therefrom shall be undertaken by Party B.

4.6 Where Party B intends to change or cancel a certain advertising order, it shall, seven (7)
working days prior to the airdate, issue to Party A a written notice bearing its signature and
seal. In case of a notice to Party A four (4) working days prior to the airdate, Party B shall pay
to Party A the commission charge at 20% of the value of the changed or cancelled part. Change or
cancellation of orders within three (3) working days prior to the airdate shall be prohibited.

4.7 During this cooperation, Party B may not transfer all or part of the licensed ad-agency slots
in any way to a third person for agency operation; otherwise, Party A shall have the right to
rescind the Contract and claim against Party B for the penalty at 20% of total Contract Value.

4.8 Party B agrees that detailed issues concerning advertising placement shall be subject to the
Advertising Placement Instructions formulated by Party A. After the advertisements are broadcast,
Party B shall be fully responsible for all economic or legal liabilities as a result of political
mistakes or violation of pertinent regulations. Party A’s examination shall not result in its
liabilities for the validity and authenticity of the advertisement contents or for potential
consequences.

4.9 In case of objections to the advertisement broadcast, Party B shall, within fifteen (15)
working days from the actual airdate or the agreed airdate, put them forward in writing to Party A
and produce the written information and relevant advertisement detecting materials issued by the
authoritative detecting company recognized by the Parties. Where Party B has no written objections
made to Party A fifteen (15) working days after the agreed airdate, the broadcasting shall be
deemed as accurate and valid. In case of errors or omissions, Party A shall take remedies
respectively on the principle of “Once for Each Error”

-45-

 

or “Twice for Each Omission”, and the period of time shall be subject to Party A’s arrangement
according to the program schedule. Party A shall, at Party B’s request, issue the broadcasting
certification within one (1) day after broadcasting such advertisements.

4.10 “Omission” as mentioned in the Contract means failure to broadcast the advertisements ordered
by Party B. “Error” means Party A’s errors made during the broadcasting of Party B’s
advertisements, such as editions, dates, periods of time and channels. However, in case of
adjustments of the program concerned, time or channel of the program as a result of changes in
relevant programs on the TV channels of Shanghai Media Group, which results in the fact that
certain advertisings cannot be broadcast or the advertisings broadcast actually conflict with the
orders, such circumstances shall not be deemed as Errors or Omissions.

4.11 Party B shall have the right to enjoy the treatments available to Party A’s contracting
companies. Party A will protect Party B’s brands on the principle of fair competition.

4.12 Party B shall, at Party A’s request, provide the materials necessary for production of
“5-second Standard Package during Channel Image Publicity” and shall be responsible for the
validity of such materials. Party B shall be responsible for any dispute or any and all losses to
or adverse impacts on Party A arising from the validity of such materials, including, but not
limited to, attorney fee and legal cost. Party A shall have the decision-making right and the final
approval right upon the production of “5-second Standard Package during Channel Image Publicity”.
Party B shall be solely and fully responsible for failure to provide required materials in time.
Copyright to “5-second Standard Package during Channel Image Publicity” shall vest in Party A, and
Party B may not use it without Party A’s written permission.

V. Liability for Breach of Contract

5.1 Neither party may modify or rescind the Contract as of the effective date of the Contract.
Unless otherwise stipulated by laws and the Contract, rescission of and modification to the
Contract shall be subject to the negotiation between the Parties and specified in a supplemental
agreement in accordance with laws; otherwise, it constitutes a default, and the breaching party
shall pay to the other party 20% of the contract amount in respect of the unperformed part as
liquidated damages.

5.2 Unless otherwise stipulated herein, Party B’s overdue payment shall entitle Party A to stop
broadcasting Party B’s advertisements and performing other obligations hereunder; in addition,
Party A shall have the right to claim against Party B for the penalty of overdue payment at the
daily rate of 0.5‰ of the total outstanding amount. Where Party B fails to make payment within 15
days, Party A shall have the right to rescind the Contract at its own discretion and not to refund
the performance bond to Party B.

5.3 Party B agrees that Party A may deduct the advertising broadcasting fee, penalty, liquidated
damages and compensations for overdue payment directly from the performance bond paid by Party B.
In such case, Party B shall make up the balance of the performance bond within ten (10) days after
Party A’s deduction. Where Party B fails to make up the balance on schedule, Party A shall have the
right to take measures according to the foresaid clause.

5.4 Party B’s failure to pay the Contract Value in full shall entitle Party A to deduct the
outstanding part of the Contract Value from the performance bond. Where the performance bond is
insufficient to deduct the outstanding part of the Contract Value, Party A shall be entitled to
further recourse against Party B.

5.5 Party B shall be responsible for any and all disputes arising from its own advertisements and
for all final economic and legal liabilities concerned.

VI. Supplemental Clauses

6.1 The Contract Value as mentioned in the Contract means the Paid-up Amount for Advertising
Placement undertaken by Party B under Article 2.2 hereof.

6.2 Without the written consent of the other party, neither party may transfer the Contract or any
of its rights or obligations under the Contract. Otherwise, it shall be deemed as a breach of
Contract, and the breaching party shall assume the liability for breach of contract.

-46-

 

VII. Dispute Settlement

Any dispute arising from the performance of the Contract after the effective date of the Contract
shall be settled through amiable negotiation; where negotiation fails, the Parties agree to submit
the dispute to the jurisdiction of the People’s Court at the place where Party A is located.

VIII. Miscellaneous

8.1 Any matter uncovered herein shall be settled through negotiation between the Parties on the
principles of mutual understanding and mutual accommodation.

8.2 The following documents shall have the dame legal force with the Contract:

1) Advertising Placement Order;

2) Advertising Quotations 2008 publicized recently by Party A (in case of changes, subject to the
quotation publicized by Party A then);

3) Advertising Placement Instructions, and

4) Party A’s Advertising Operation Rules 2008

The Contract shall take effect with the signatures of the Parties. The Contract shall be made in
three copies, two for Party A and one for Party B.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Party A: Shanghai Fashion Cultural
Media Co., Ltd.	 	 	 	Party B: Shanghai Dianguang Media
Transmission Co., Ltd.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Signature: 	 	/s/ Yong Wang	 	 	 	Signature: 	 	/s/ Juanjuan Tang	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date:

	 	January 8, 2008
	 	 	 	Date:
	 	January 8, 2008	 	 

-47-

 

-48-exv10w1w6

Exhibit 10.1.6

August 12, 2009

Redgate Media Group

Redgate Interactive Advertising (Beijing) Co., Ltd.

(  )

And

Jinyu Fan  (  )

Juanjuan
Tang (  )

 

AMENDMENT AND SUPPLEMENTAL AGREEMENT

 

 

 

     THIS AMENDMENT AND SUPPLEMENTAL AGREEMENT (this “Amendment”) is made on August 12, 2009:

Among

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

and

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

and

Jinyu Fan (in Chinese ), citizen of the PRC, whose PRC identity card number is
310104195808141612;

Juanjuan Tang (in Chinese , together with Jinyu Fan, the “Allottees” and each an
“Allottee”), citizen of the PRC, whose PRC identity card number is 310103195712232046;

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

WHEREAS:

	A.	 	The Parties have executed a Share Issuance Agreement on April 8, 2008 (the “SIA”), pursuant
to which the Company agreed to allot and issue or procure the allotment and issuance of the
Issued Shares (as defined therein) and effect the Cash Payment (as defined therein) to the
Allottees in consideration of the provision of management services by the Allottees to
Dianguang, and the giving of confidentiality undertaking and Non-Competition Undertaking by
the Allottees to the Company as set out therein.

2

 

	B.	 	The Parties have executed an amendment and supplemental agreement to the Equity Transfer
Agreement on August 4, 2009 in connection with the payment of considerations under the Equity
Transfer Agreement.
	 
	C.	 	The Parties now wish to amend and supplement certain provisions of the SIA on and subject to
the terms of this Amendment.

IT IS AGREED as follows:

	1.	 	AMENDMENTS AND SUPPLEMENTS
	 
	 	 	On and from the date of this Amendment:

	 	1.1	 	The provisions of the SIA shall be amended and/or supplemented in accordance
with the terms stipulated herein; and
	 
	 	1.2	 	Except as provided for under this Amendment, the remaining provisions of the
SIA shall remain in full force and effect and this Amendment and the SIA shall be read
and construed as one and the same agreement.

	2.	 	INTERPRETATION
	 
	 	 	All capitalized terms used but not defined herein shall have the meaning ascribed to them in
the SIA.
	 
	3.	 	PAYMENT OF OFFSHORE CONSIDERATION

	 	3.1	 	General Principles
	 
	 	 	 	Notwithstanding anything to the contrary in the SIA, the Parties hereby acknowledge
and agree that the Issued Shares and Cash Payment (collectively, the “Offshore
Consideration”) in the SIA shall be adjusted according to Clause 3.2 of this
Amendment.
	 
	 	3.2	 	Amendments to the SIA
	 
	 	 	 	For the avoidance of doubt, “this Agreement” referred to in Clause 3.2 of this
Amendment means the SIA as defined therein.

	 	3.2.1	 	The definition of the Tranche A Shares as well as any
reference to the Tranche A Shares in the SIA shall be deleted.

3

 

	 	3.2.2	 	The definitions of certain capitalized terms in Section 1.1 of
the SIA shall be replaced with the following definitions:

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

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

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

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

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

	 	3.2.3	 	Section 2.2 of the SIA shall be replaced with the following clauses:

Section 2.2 Determination of Consideration

(a) if an IPO occurs before 31st December 2009, then the Allottee
shall be entitled to receive:

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

Y = 7 x A x 30%

Where:

Y = the amount of Tranche A Cash Payment

A = the audited net profits of Dianguang for the year ended 31st
December 2008 calculated in accordance with US GAAP with an unqualified audit
opinion (“Dianguang 2008 Net Profits”)

The Company will pay an amount equivalent to RMB 1,800,000 (“Payment of RMB
1,800,000”) as part of Tranche A Cash Payment into the bank account(s) designated
by the Allottees within seven (7) days after the

4

 

completion of the audit on Dianguang for the year 2008 as set forth in Section
2.4(a), provided that conditions precedent to the Tranche A Completion under
Section 2.4 of this Agreement are satisfied or waived by the Company,.

If the Tranche A Cash Payment is more than RMB 1,800,000, then the rest amount of
Tranche A Cash Payment will be paid to the Allottes in the 4th quarter of 2009
provided that conditions precedent to the Tranche A Completion under Section 2.4
of this Agreement are satisfied or waived by the Company. But the Company will
try its best to pay the Tranche A Cash Payment before November 30th of
2009.

If the Tranche A Cash Payment is less than RMB 1,800,000, then the Payment of RMB
1,800,000 will be deemed as the full completion of Tranche A Cash Payment.

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

	 	 	 	 
	X =

	 	A x C x 30% x D - ( F+Dianguang Equity Transfer Consideration)x 1/2	 
	 	 	 
	 	B	 

Where:

X = the number of the Tranche B Shares

A = the audited net profits of Dianguang for the year ended 31st
December 2009 calculated in accordance with US GAAP with an unqualified audit
opinion (“Dianguang 2009 Net Profits”)

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

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

     The P/E will be Non GAAP P/E set out in the first research reports to be
issued by each of the bookrunners and co-managers of the IPO of Redgate Media
Group .

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

F = the Audit fee for years 2005 to 2008 historical financial report auditing.
The final amount shall be decided by the auditing firm’s working hours
allocation. The audit fee should be less than USD 100,000. USD-RMB exchange rate
should use closing USD-RMB exchange rate on August 4th, 2009.

provided that, the Company may elect at its sole discretion to pay cash
or procure the payment of cash to the Allottee in lieu of all or part of the
Tranche B Shares issuable to the Allottee under this Section 2.2(a)(ii), in which
case, the amount of cash payable in lieu of Tranche B Shares shall be

5

 

equal to the number of Tranche B Shares for which the Company has elected to pay
cash (in lieu of issuance of Tranche B Shares) under this Section 2.2(a)(ii)
multiplied by B;

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

	 	 	 	 
	X =

	 	A x C x 40% x D - ( F+Dianguang Equity Transfer Consideration) x 1/2	 
	 	 	 
	 	B	 

Where:

X = the number of the Tranche C Shares

A = the audited net profits of Dianguang for the year ended 31st
December 2010 calculated in accordance with US GAAP with an unqualified audit
opinion (“Dianguang 2010 Net Profits”)

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

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

     The P/E will be Non GAAP P/E set out in the first research reports to be
issued by each of the bookrunners and co-managers of the IPO of Redgate Media
Group .

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

F = the Audit fee for years 2005 to 2008 historical financial report auditing.

The final amount shall be decided by the auditing firm’s working hours
allocation. The audit fee should be less than USD 100,000. USD-RMB exchange rate
should use closing USD-RMB exchange rate on August 4th, 2009.

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

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

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

Y = 7 x A x 30%

Where:

6

 

Y = the amount of Tranche A Cash Payment

A = the Dianguang 2008 Net Profits

The Company will pay an amount equivalent to RMB 1,800,000 (“Payment of RMB
1,800,000”) as part of Tranche A Cash Payment into the bank account(s) designated
by the Allottees within seven (7) days after the completion of the Audit on
Dianguang for the Year 2008 as set forth in Section 2.4(a) provided that
conditions precedent to the Tranche A Completion under Section 2.4 of this
Agreement are satisfied or waived by the Company,.

If the Tranche A Cash Payment is more than RMB 1,800,000, then the rest amount of
Tranche A Cash Payment will be paid to the Allottes in 4th quarter of 2009
provided that conditions precedent to the Tranche A Completion under Section 2.4
of this Agreement are satisfied or waived by the Company. But the Company will
try its best to pay the Tranche A Cash Payment before November 30th of
2009.

If the Tranche A Cash Payment is less than RMB 1,800,000, then the Payment of RMB
1,800,000 will be deemed as the full completion of Tranche A Cash Payment.

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

(1) if the Dianguang 2009 Net Profits are more than zero, then the Allottee shall
receive the Tranche B Cash Payment calculated as follows:

Y = 7 x A x 30% - ( F+Dianguang Equity Transfer Consideration) x 1/2

Where:

Y = the amount of Tranche B Cash Payment

A = the Dianguang 2009 Net Profits

F = the Audit fee for years 2005 to 2008 historical financial report auditing.The
final amount shall be decided by the auditing firm’s working hours allocation.
The audit fee should be less than USD 100,000. USD-RMB exchange rate should use
closing USD-RMB exchange rate on August 4th, 2009.

(2) if the Dianguang 2009 Net Profits are zero or less than zero, then the
Allottee shall receive USD8,000 as the Tranche B Cash Payment;

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

	 	 	 	 
	X =

	 	A x C x 40% x D - ( F+Dianguang Equity Transfer Consideration)x 1/2
	 	 
	 	B

7

 

Where:

X = the number of the Tranche C Shares

A = Dianguang 2010 Net Profits

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

C = P/E multiple used for IPO share pricing

     The P/E will be Non GAAP P/E set out in the first research reports to be
issued by each of the bookrunners and co-managers of the IPO of Redgate Media
Group.

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

F = the Audit fee for years 2005 to 2008 historical financial report auditing.
The final amount shall be decided by the auditing firm’s working hours
allocation. The audit fee should be less than USD 100,000. USD-RMB exchange rate
should use closing USD-RMB exchange rate on August 4th, 2009.

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

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

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

Y = 7 x A x 30%

Where:

Y = the amount of Tranche A Cash Payment

A = the Dianguang 2008 Net Profits

The Company will pay an amount equivalent to RMB 1,800,000 (“Payment of RMB
1,800,000”) as part of Tranche A Cash Payment into the bank account(s) designated
by the Allottees within seven (7) days after the completion of the Audit on
Dianguang for the Year 2008 as set forth in Section 2.4(a) provided that
conditions precedent to the Tranche A Completion under Section 2.4 of this
Agreement are satisfied or waived by the Company,.

If the Tranche A Cash Payment is more than RMB 1,800,000, then the rest amount of
Tranche A Cash Payment will be paid to the Allottes in 4th

8

 

quarter of 2009 provided that conditions precedent to the Tranche A Completion
under Section 2.4 of this Agreement are satisfied or waived by the Company. But
Company will try it best to pay Tranche A Cash Payment before November
30th of 2009.

If the Tranche A Cash Payment is less than RMB 1,800,000, then the Payment of RMB
1,800,000 will be deemed as the full completion of Tranche A Cash Payment.

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

(1) if the Dianguang 2009 Net Profits are more than zero, then the Allottee shall
receive the Tranche B Cash Payment calculated as follows:

Y = 7 x A x 30% - ( F+Dianguang Equity Transfer Consideration)
x 1/2

Where:

Y = the amount of Tranche B Cash Payment

A = the Dianguang 2009 Net Profits

F = the Audit fee for years 2005 to 2008 historical financial report auditing.
The final amount shall be decided by the auditing firm’s working hours
allocation. The audit fee should be less than USD 100,000. USD-RMB exchange rate
should use closing USD-RMB exchange rate on August 4th, 2009.

(2) if the Dianguang 2009 Net Profits are zero or less than zero, then the
Allottee shall receive USD8,000 as the Tranche B Cash Payment;

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

(1) if the Dianguang 2010 Net Profits are more than zero, then the Allottee shall
receive the Tranche C Cash Payment calculated as follows:

Y = 7 x A x 40% - (F+Dianguang Equity Transfer Consideration) x 1/2

Where:

Y = the amount of Tranche C Cash Payment

A = the Dianguang 2010 Net Profits

F = the Audit fee for years 2005 to 2008 historical financial report auditing.
The final amount shall be decided by the auditing firm’s working hours
allocation. The audit fee should be less than USD 100,000. USD-RMB exchange rate
should use closing USD-RMB exchange rate on August 4th, 2009.

9

 

(2) if the Dianguang 2010 Net Profits are zero or less than zero, then the
Allottee shall receive USD4,000 as the Tranche C Cash Payment.

	 	3.2.4	 	Paragraph two and three of Section 2.7 of the SIA shall be
replaced with the following clauses and the other contents of Section 2.7 shall
remain the same:

Section 2.7 Adjustment of Consideration

......

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

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

......

	 	3.2.5	 	The following clauses shall be inserted as Section 2.9 of the SIA:

Section 2.9 Bonus to the Allottees

If the Dianguang 2009 Net Profits is increased by 20% or more as compared
with the Dianguang 2008 Net Profits and the Dianguang 2010 Net Profits is also
increased by more than 20% and less than 40% as compared with the Dianguang 2009
Net Profits provided that such profits are gained through operation using only
Dianguang’s own capital without any loans or financings in any other forms, the
Allottees shall be entitled to receive a bonus in the amount of two times of the
increased net profits from 2008 to 2010 on Tranche C Completion Date. The Company
may elect at its sole discretion to pay such bonus in cash or by Shares of the
Listco if an IPO has already occurred.

If the Dianguang 2009 Net Profits is increased by 40% or more as compared
with the Dianguang 2008 Net Profits and the Dianguang 2010 Net Profits is also
increased by 40% or more as compared with the Dianguang 2009 Net Profits provided
that such profits are gained through operation using only Dianguan’s own capital
without any loans or financings in any other forms, the Allottees shall be
entitled to receive a bonus in the amount of three times of the increased net
profits from 2008 to 2010 on Tranche C Completion Date. The Company may elect at
its sole discretion to pay such bonus in cash or by Shares of the Listco if an
IPO has already occurred.

10

 

	 	3.2.6	 	Section 2.4 (a) of the SIA shall be replaced with the
following clause:

	 	(a)	 	(Audit on Dianguang for the Year 2008) the financial
statements of Dianguang for year 2008 have been audited in accordance with
the US GAAP by an accounting firm designated by the Company, provided that
such audit shall occur and be completed within the first eight (8) calendar
months of year 2009.

	 	3.2.7	 	The following clauses shall be inserted as Section 2.4(k) and
2.4(l) of the SIA:

	 	(k)	 	(Account Receivable for the Year 2008) no less than 90%
of the accounts receivable of Dianguang for year 2008 have been collected by
Dianguang before the completion of the audit on Dianguang for the Year 2008
as stipulated in Section 2.4(a).
	 
	 	(l)	 	(Account Receivable Income Statement Treatment) in case
Dianguang is unable to collect 100% of its prior year’s accounts receivable
before the end of the current year, the uncollected portion of accounts
receivable can only be recorded into the Income Statement after it has been
collected.

	 	3.2.8	 	The following clauses shall be inserted as Section 2.5(j),
2.5(k) and 2.5(l) of the SIA:

	 	(j)	 	(Account Receivable for the Year 2008) all the accounts
receivable of Dianguang for year 2008 have been collected by Dianguang
before the end of year 2009.
	 
	 	(k)	 	(Account Receivable for the Year 2009) no less than 90%
of the accounts receivable of Dianguang for year 2009 have been collected by
Dianguang before the completion of the audit on Dianguang for the Year 2009
as stipulated in Section 2.5 (a).
	 
	 	(l)	 	(Account Receivable Income Statement Treatment) in case
Dianguang is unable to collect 100% of its prior year’s accounts receivable,
the uncollected portion of accounts receivable can only be recorded into the
Income Statement after it has been collected.

	 	3.2.9	 	The following clauses shall be inserted as Section 2.6(j),
2.6(k) and 2.6(l)of the SIA:

	 	(j)	 	(Account Receivable for the Year 2009) all the accounts
receivable of Dianguang for year 2009 have been collected by Dianguang
before the end of year 2010.
	 
	 	(k)	 	(Account Receivable for the Year 2010) no less than 90%
of the accounts receivable of Dianguang for year 2010 have been collected by
Dianguang before the completion of the audit on Dianguang for the Year 2010
as stipulated in Section 2.6(a).
	 
	 	(l)	 	(Account Receivable Income Statement Treatment) in case

11

 

	 	 	 	Dianguang is unable to collect 100% of its prior year’s accounts receivable,
the uncollected portion of accounts receivable can only be recorded into the
Income Statement after it has been collected.

	4	 	GOVERNING LAW AND DISPUTE RESOLUTION

	 	4.1	 	Governing Law
	 
	 	 	 	This Amendment is governed by the laws of Hong Kong, without regard to
principles of conflicts of law thereunder.

	 	4.2	 	Dispute Resolution

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

	5	 	LANGUAGE

This Amendment is made out in Chinese and English language and it is acknowledged by the Parties
that both versions are consistent in all material respects and are equally authentic.

	6	 	COUNTERPARTS

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

12

 

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

	 	 	 	 	 
	Redgate Media Group

 	 	 
	By  	/s/ Zhu Ying
 	 	 
	 	Name:  	Zhu Ying 	 	 
	 	Title:  	President 	 	 
	 

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

	 	 	 	 	 
	 	 	 
	By  	/s/ Zhu Ying
 	 	 
	 	Name:  	Zhu Ying 	 	 
	 	Title:  	Board Chairman 	 	 
	 
	Allottees:

 	 	 
	Jinyu Fan ()
 	 	 
	 
	By  	/s/ Jinyu Fan  	 	 
	 	 	 
	 
	 	 	 
	Juanjuan Tang ()
 	 	 
	 
	By  	/s/ Juanjuan Tang

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00168-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00168-of-00352.parquet"}]]