Document:

exv10w4w4

Exhibit 10.4.4

Execution Copy

[Translation of Chinese original]

EQUITY TRANSFER AGREEMENT

IN CONNECTION WITH

SHANGHAI HONGMEN ADVERTISING CO., LTD.

By and Among

REDGATE MEDIA AD CO., LTD.

WEIDONG ZHU

And

SHANGHAI HONGMEN ADVERTISING CO., LTD.

Date: December 19, 2007

King & Wood

Shanghai Office

 

 

Table of Contents

	 	 	 	 	 	 	 
	Article	 	Heading	 	Page	 
	 
	 	 	 	 	 	 
	1.
	 	Definitions	 	 	1	 
	2.
	 	Transfer of Equity Interest	 	 	4	 
	3.
	 	Conditions Precedent	 	 	4	 
	4.
	 	Covenants	 	 	6	 
	5.
	 	Completion of the Transfer of Equity Interest	 	 	7	 
	6.
	 	Warranties	 	 	8	 
	7.
	 	Confidentiality	 	 	9	 
	8.
	 	Transfer	 	 	10	 
	9.
	 	Governing Law and Dispute Resolution	 	 	10	 
	10.
	 	Notices	 	 	10	 
	10.
	 	Costs	 	 	11	 
	12.
	 	Entire Agreement	 	 	12	 
	13.
	 	Severability	 	 	12	 
	14.
	 	Waiver	 	 	12	 
	15.
	 	Liability for Breach of Contract	 	 	12	 
	Schedule 1.
	 	Balance Sheet	 	 	14	 
	Schedule 2.
	 	Warranties	 	 	15	 
	Schedule 3.
	 	Disclosure Schedule	 	 	29	 
	Schedule 4.
	 	Equity Transfer Agreement (For Business Registration)	 	 	30	 

 

 

THIS
AGREEMENT is entered into in Beijing, the PRC on this 19th day of December
2007 by and among:

	(1)	 	REDGATE MEDIA AD CO., LTD., a limited liability company established and existing under the
laws of the PRC, with its registered address at Suite 1807, 15th Floor, Tower B,
Jianwai SOHO, 39 Dongsanhuanzhong Road, Chaoyang District, Beijing (the “Transferee”);
	 
	(2)	 	WEIDONG ZHU, the natural person shareholder of Shanghai Hongmen Advertising Co., Ltd. whose
ID card number is 310110197006105018 (the “Transferor”); and
	 
	(3)	 	SHANGHAI HONGMEN ADVERTISING CO., LTD., a limited liability company established and existing
under the laws of the PRC, with its registered address at Block P-1, 7523 Beiqing Gonglu,
Zhonggu Town, Qingpu District, Shanghai (the “Company”).
	 
	 	 	(The Transferee, the Transferor and the Company are collectively referred to as the
“Parties” and individually as a “Party”.)

WHEREAS:

	(A)	 	The Company was established on June 9, 2004. As at the execution date hereof, the Company’s
registered capital is Renminbi Six Million Four Hundred and Ten Thousand (RMB6,410,000).
	 
	(B)	 	The Transferor wishes to sell and the Transferee wishes to purchase the Subject Equity (as
defined below) on the terms and conditions hereof.
	 
	(C)	 	The Transferor and the Company agree to give certain representations, warranties and
covenants in respect of the Transfer of Equity Interest.

The Parties have agreed as follows:

	1.	 	Definitions

1.1 In this Agreement, the following terms shall have the meanings assigned to them below:

	 	 	“Warranties” means the representations and warranties as given by Transferor to the
Transferee in Schedule 2.
	 
	 	 	“Subject Equity” means the 0.15 percent of the equity interest of the Company to be
purchased by Party A pursuant to this Agreement.
	 
	 	 	“Encumbrances” means any mortgages, pledges, liens, options, sale rights, preemptive rights,
rights of first refusal or any manner of security interest.
	 
	 	 	“Board” means the board of directors of the Company.

 

 

	 	 	“Costs” means any manner of liabilities, losses, damages, expenses (including legal fees)
and expenditures (including Taxes and Levies).
	 
	 	 	“Transfer of Equity Interest” means the purchase and holding of the Company’s Subject Equity
pursuant to this Agreement.
	 
	 	 	“Equity Transfer and Capital Increase Agreement” means the Equity Transfer and Capital
Increase Agreement executed by the Parties and Shanghai Yuqing Advertising Broadcasting Co.,
Ltd. and other relevant parties on December 19, 2007.
	 
	 	 	“Completion of the Transfer of Equity Interest” means the confirmation by the Parties
pursuant to Article 5 hereof of the fulfillment or waiver of the Conditions Precedent.
	 
	 	 	“Connected Person” means, in respect of any Party, any company, partnership or other entity
which, directly or indirectly, controls or is controlled by, or under common control with
said Party; if the Party is a natural person, means his or her spouse or relatives. (For
the purposes of this Agreement, the term “control” means exercising control over such party
through a direct or indirect holding of such party’s voting equity or by way of an agreement
or other arrangement).
	 
	 	 	“US Dollar” means the legal currency of the United States of America.
	 
	 	 	“Project” means the project launched by the Company in 2004 under which it plans to erect
1500 — 2,000 mosquito repellent lamps in universities, colleges and neighborhoods in
Shanghai in two phases, the first phase to take place prior to June 2006 and the other phase
to be approved by the relevant government authority.
	 
	 	 	“Disclosure Schedule” means the disclosure schedule signed and submitted by the Transferor
to the Transferee on or before the execution date hereof to disclose exceptions to the
Warranties, and all disclosed matters must be specific and complete, correspond in sequence
with the numbers of the relevant Articles in Schedule 2 (see Schedule 3 hereto).
	 
	 	 	“Renminbi” or “RMB” means the legal currency of the PRC.
	 
	 	 	“Legal Action” includes any claim, legal action, legal procedure, lawsuit, litigation,
indictment, investigation, inquiry or arbitration involving the Company (other than legal
actions instituted by it as the plaintiff in the ordinary course of its business for the
purpose of recovering of debts).
	 
	 	 	“Social Insurance” means the pension funds, housing fund contributions, unemployment
insurance, work-related injury insurance, medical insurance and comprehensive insurance that
the Company is required to pay for its employees pursuant to state and Shanghai local laws
and policies, and any other mandatory social security funds specified by the PRC government
from time to time.
	 
	 	 	“Taxes and Levies” means any and all taxes payable (including but not limited to any income
tax, business tax, stamp tax or other taxes, customs duties, charges, fees,

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	 	 	deductions, penalties or withholding tax that are imposed, collected or assessed). The term
“taxes” shall also be construed accordingly.

	 	 	“Consents” means the permits, consents, authorizations, orders, guarantees, confirmations,
permissions, licenses, approvals and authorizations necessary or required to conduct the
Company’s existing or previous business or business it will prepare to engage in the future.
	 
	 	 	“Conditions Precedent” means the conditions set forth in Article 3.1 hereof.
	 
	 	 	“New AoA” means the amended articles of association of the Company or the amendments to the
articles of association executed on the date of the formation of this Agreement.
	 
	 	 	“Outstanding Debts” has the meaning assigned to it in the Equity Transfer and Capital
Increase Agreement.
	 
	 	 	“Business Day” means a day on which banks in Shanghai, PRC are open for business (other than
a Saturday, Sunday or statutory holiday).
	 
	 	 	“Accounts” means the Company’s accounts for the financial period ending on the Balance Sheet
Date.
	 
	 	 	“Balance Sheet” means the balance sheet as at the Balance Sheet Date, attached hereto as
Schedule 1.
	 
	 	 	“Balance Sheet Date” means August 31, 2007.
	 
	 	 	“Government Approvals” means all of the approval documents for the matters described herein
from the PRC government.
	 
	 	 	“Transfer Price” means the transfer price described in Article 2.2 hereof payable by the
Transferee into the Transferor’s domestic account.
	 
	 	 	“Key Managers” means Weidong Zhu (General Manager) and Yun Yang (Director of Development).
	 
	 	 	“Intellectual Property” shall include patents, patent applications, utility models,
trademarks, service marks, registered designs, copyrights, technical drawings, trade names,
database rights, internet domain names, brand names, computer software programs and systems,
proprietary technologies, inventions and creations, confidential information and other
industrial and commercial intellectual property rights (regardless of whether registered or
registrable), as well as all the application documents for applications to register or
protect the foregoing.
	 
	 	 	“PRC” means, for the purposes of this Agreement, the mainland area of the People’s Republic
of China, excluding the Hong Kong Special Administrative Region, the Macao Special
Administrative Region and Taiwan.

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	 	 	“Capital Increase” means the matters relating to the investment by Pacific Asia Mode Cube
Limited (“PAMC”, which, together with the Transferor, are collectively referred to as the
“PAMC Group”) of Renminbi Fifteen Million (RMB15,000,000) to subscribe for the increase in
the Company’s capital pursuant to the Investment Framework Agreement executed by the Parties
and other relevant parties as of the date hereof.
	 
	 	 	“Capital Increase Agreement” means the agreement concerning the Company’s Capital Increase
executed by the Parties and other relevant parties as of the date hereof and pursuant to
which the investor subscribes for the Company’s Capital Increase.
	 
	1.2	 	Headings
	 
	 	 	The headings to the Articles are for reference only and shall not
affect the interpretation hereof.
	 
	1.3	 	References
	 
	 	 	References to PRC laws herein shall include any statutes, regulations,
policies with legal force and other auxiliary legislation within the
said territory. References to laws shall include versions thereof as
revised or amended from time to time. References to this Agreement
and any contract shall be construed as including the relevant contract
as may be revised, amended or novated.
	 
	1.4	 	Schedules
	 
	 	 	The Schedules comprise all of the Schedules set forth in the Table of
Contents hereof, constitute integral parts hereof and shall be of
equal validity as this Agreement.
	 
	2.	 	Transfer of Equity Interest
	 
	2.1	 	Subject to fulfillment of the Conditions Precedent, the Transferor agrees to sell to the
Transferee 0.15 percent of the equity interest it holds in the Company and the Transferee
agrees to purchase the above Subject Equity, including all rights attaching now or in future
thereto, without any Encumbrances.
	 
	2.2	 	Unless the Parties agree to revise the Transfer Price through negotiations, the Transfer
Price for the Subject Equity shall be Renminbi Ten Thousand (RMB10,000).
	 
	3.	 	Conditions Precedent
	 
	3.1	 	The transaction described in Article 2 hereof shall be conditioned on the fulfillment of the
conditions set forth below or the waiver in writing thereof by the Transferee:

	 	3.1.1	 	all necessary resolutions have been adopted by the shareholders of the Company
to:

	 	(i)	 	approve the transaction described herein;

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	 	(ii)	 	approve the sale of the Subject Equity to the Transferee
pursuant hereto;
	 
	 	(iii)	 	approve the corresponding amendments to the Company’s existing
articles of association; and
	 
	 	(iv)	 	waive the right of first refusal of the other shareholders of
the Company;

	 	3.1.2	 	the New AoA has been executed by the Parties of;
	 
	 	3.1.3	 	the Warranties remain true, accurate, complete and not misleading as of the
date hereof and as of the date of Completion of the Transfer of Equity Interest;
	 
	 	3.1.4	 	the Company has secured all necessary Government Approvals for the
implementation of the Project (including additional or amended approvals required from
time to time in light of the actual progress of the project);
	 
	 	3.1.5	 	the Transferee has reached an agreement with Shanghai Aoxue Advertising Media
Co., Ltd. in respect of the adjustment of the percentage of the equity interest in the
Company held and transferred by it, executed the relevant equity transfer agreement,
and completed the procedures for the amendment of business registration;
	 
	 	3.1.6	 	the Company has executed with Chengye Guo the Fixed Return Right Termination
Agreement (substantially in the form of Schedule 11 to the Equity Transfer and Capital
Increase Agreement) confirming the termination of all of the legal documents concerning
Chengye Guo’s right to fixed returns (including but not limited to the Return Rights
Agreement and the Return Rights Conversion Agreement executed by Chengye Guo and the
Company on September 27, 2004 and April 11, 2006 respectively);
	 
	 	3.1.7	 	the Parties have reached agreement on the legal documents for the proposed
Transfer of Equity Interest (including but not limited to the equity interest transfer
agreement in Schedule 4 the execution of which is required for the purposes of business
registration) and any revisions made to the legal documents at the request of the
government authorities have been approved by the Parties;
	 
	 	3.1.8	 	the approvals of the relevant PRC government authorities and all relevant
Government approval documents for the proposed Transfer of Equity Interest have been
secured (if applicable), the Company has completed business registration procedures in
respect of the Transfer of Equity Interest, relevant amendments have been made to the
register of shareholders of the Company and the Transferee has obtained the investment
certificate issued by the Company;
	 
	 	3.1.9	 	the commercial, legal and financial due diligence on the Company has been
performed by the Transferee to its satisfaction (including but not limited to the
completion by person(s) designated by the Transferee, to the Transferee’s

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	 	 	 	satisfaction, of the onsite inspection of the 800 lamps of the Project which have
been erected);
	 
	 	3.1.10	 	the Company has executed with each of its employees an employment contract in form
and substance satisfactory to the Transferee, and paid on behalf of all of its
employees the various types of Social Insurance required by PRC laws and statutes; the
term of employment specified in each employment contract executed by the Company with a
Key Manager shall not be less than three (3) years;
	 
	 	3.1.11	 	the Company has executed with each of its employees a non-disclosure agreement and
intellectual property agreement in form and substance satisfactory to the Transferee,
and with each Key Manager a non-disclosure and intellectual property agreement and
non-compete agreement in form and substance satisfactory to the Transferee;
	 
	 	3.1.12	 	the Company and PAMC Group have executed with Chengye Guo and Shanghai Aoxue
Advertising Media Co., Ltd. a non-disclosure agreement and a non-compete agreement in
form and substance satisfactory to PAMC Group;
	 
	 	3.1.13	 	the Company and PAMC Group have executed with the Transferor a non-disclosure
agreement and a non-compete agreement in form and substance satisfactory to PAMC Group;
	 
	 	3.1.14	 	the Parties have reached a consensus on the specific plan and conditions for the
Company’s Capital Increase by PAMC and executed a capital increase agreement and
related legal documents (including but not limited to the equity joint venture contract
and articles of association for the conversion into a Sino-foreign equity joint
venture);
	 
	 	3.1.15	 	the Company has completely discharged all of the Outstanding Debts pursuant to the
Equity Transfer and Capital Increase Agreement; and
	 
	 	3.1.16	 	all of the conditions precedent set forth in Article 4 of the Equity Transfer and
Capital Increase Agreement have been fulfilled or waived.

	3.2	 	The Transferor undertakes that it will use all reasonable efforts to ensure that the
Conditions Precedent set forth in Article 3.1 are fulfilled as soon as possible within a
reasonable and practicable time, but under no circumstance later than three (3) months after
the execution hereof.
	 
	3.3	 	The Transferee has the right, at its own discretion and by providing written notice to the
Company, to waive all or part of the Conditions Precedent set forth in Article 3.1.
	 
	4.	 	Covenants
	 
	4.1	 	Until Completion of the Transfer of Equity Interest, the Transferor and the Company shall,
unless agreed in writing by the Transferee, ensure and procure:

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	 	4.1.1	 	that the Company will take all reasonable measures to keep and protect all of
its assets;
	 
	 	4.1.2	 	the prompt disclosure by the Company or the Transferor to the Transferee of
all relevant details of facts or events (whether existing on, before or after the
execution date hereof) of which the Company or the Transferor are aware would, based on
the facts and circumstances at the time of Completion of the Transfer of Equity
Interest, constitute a breach of the Warranties given at the time in question;
	 
	 	4.1.3	 	that the Company does not take any actions that would materially impede or
unduly delay the completion of the transactions described herein, or any actions that
would result in a breach of the Warranties;
	 
	 	4.1.4	 	that the Company does not take actions without the consent of the shareholders
meeting or Board which, pursuant to laws or the articles of association, require the
consent of the Company’s shareholders or Board;
	 
	 	4.1.5	 	that the Company does not enter into any agreement, contract, arrangement or
transaction other than in the ordinary course of business and with the written consent
of the Transferee;
	 
	 	4.1.6	 	that the Company carry out all necessary Government Approval, registration and
other such relevant procedures as required (if any) by the relevant government
authorities during each phase of the Project.

	4.2	 	If either the Transferor or the Company materially breaches its Covenants in this Article 4,
a Warranty or another obligation hereunder before Completion of the Transfer of Equity
Interest, the Transferee shall have the right to unconditionally terminate this Agreement
without taking any liability and demand that the Transferor refund the Transfer Price
hereunder.
	 
	4.3	 	The Transferor hereby gives covenants identical to those set forth in Articles 5.3, 5.4 and
5.5 of the Equity Transfer and Capital Increase Agreement.
	 
	5.	 	Completion of the Transfer of Equity Interest
	 
	5.1	 	The Parties agree that, within three (3) Business Days after fulfillment (or waiver) of all
of the Conditions Precedent, the Transferor shall provide the relevant supporting
documentation and provide written notice to the Transferee, and the Parties shall, within
three (3) Business Days after the date on which the notice is provided, or on such other date
as agreed by the Parties, jointly confirm in writing whether the Conditions Precedent have
been fulfilled.
	 
	5.2	 	Within three (3) months from the date of confirmation of the fulfillment of the Conditions
Precedent and provided that there are any Company liabilities undisclosed and existing prior
to the date of fulfillment of any of the Transferee’s Conditions Precedent, that the
representations and warranties given by the Transferee and the Company are not false or
misleading and that no event that could have a material adverse effect on the Subject Equity
or the Company’s operation has arisen, the

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	 	 	Transferee will, within ten (10) Business Days from the date of expiration of the
aforementioned three (3) month period, pay the Transfer Price into an account designated in
writing by the Transferor. Within two (2) days from the date of receipt of the
aforementioned amount, the Transferor shall issue the Transferee a written letter of
confirmation to the effect that such amount has been received.
	 
	5.3	 	If the Conditions Precedent set forth in Article 3.1 above are not or cannot be fulfilled
within three (3) months after the execution date hereof or by such other date as agreed by the
Parties, the Parties shall hold amicable consultations. If they fail to reach a consensus
thereon within fifteen (15) days, the Transferee shall not be required to continue Completion
of the Transfer of Equity Interest and shall decide, at its own discretion, by providing
written notice to the Transferor, to:

	 	5.3.1	 	opt to terminate this Agreement without liability; or
	 
	 	5.3.2	 	provided that the Transferor can complete its outstanding obligations
(including fulfillment of the relevant Conditions Precedent), select a later date for
completion of the performance of this Agreement. In such event, the Transferee shall:
(i) designate one or more dates for the completion by the Transferor of its outstanding
obligations; or (ii) release the Transferor from part of its outstanding obligations
and designate a date for completion of its remaining outstanding obligations; or (iii)
release the Transferor from all of its outstanding obligations; or
	 
	 	5.3.3	 	opt to extend the completion of this Agreement to a date designated in the
notice; under such a circumstance, if the Company or the relevant Transferor fails to
perform its or its obligations by the later date, the Transferee may again opt to apply
Article 5.3 hereof.

	6.	 	Warranties
	 
	6.1	 	The Transferor and the Company hereby make the representations and warranties to the
Transferee as set forth in Schedule 2.
	 
	6.2	 	The Transferor and the Company acknowledge that the Transferee shall execute this Agreement
and effect the Company’s Capital Increase in reliance on the Warranties and the covenants set
forth in Article 4. Each covenant and Warranty shall be deemed an independent covenant or
warranty and (unless otherwise expressly indicated) shall not be limited or constrained by any
other covenant or Warranty or by any of the other provisions of this Agreement.
	 
	6.3	 	The Warranties shall be deemed given as of the date hereof and prior to Completion of the
Transfer of Equity Interest in light of the facts and circumstances existing at such times.
	 
	6.4	 	The Transferor covenants that if it becomes aware of any fact or event that would cause any
Warranty to become untrue, inaccurate or misleading in any manner, it will promptly notify the
Transferee thereof in writing.

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	6.5	 	The Transferor agrees that if it breaches its Warranties or covenants hereunder, it shall
compensate for any direct or indirect losses incurred by the Transferee as a result thereof.
	 
	7.	 	Confidentiality
	 
	7.1	 	Without the written consent of the other Parties (such consent not to be unreasonably
withheld), no Party shall issue any pubic statement regarding this Agreement, regarding any
other related or additional documents executed in connection with the Transfer of Equity
Interest described herein, or regarding the subject of the Transfer of Equity Interest.
	 
	7.2	 	Unless otherwise provided in Article 7.1 or 7.3, the Parties shall treat any of the following
information received or obtained in connection with the formation of this Agreement as
Confidential Information, and shall not disclose or use the same:

	 	7.2.1	 	any provisions of this Agreement and any provisions of any agreement signed
pursuant to this Agreement;
	 
	 	7.2.2	 	any negotiations regarding this Agreement (as well as other relevant
agreements and legal documents); and
	 
	 	7.2.3	 	any business, financial matters and other matters (including future plans and
objectives) of any of the other Parties.

	7.3	 	Should any of the following circumstances arise (or in the event of the following
circumstances), the prohibition described in Article 7.2 against the Parties disclosing or
using any information shall not apply:

	 	7.3.1	 	any law, or the rules or statutes of any regulator or stock exchange, requires
disclosure or use thereof;
	 
	 	7.3.2	 	disclosure or use thereof is required to bestow all of the benefits of this
Agreement on the Parties;
	 
	 	7.3.3	 	disclosure or use thereof is required for any legal procedure arising in
connection with this Agreement or any other agreement formed pursuant to this
Agreement, or for reasonable disclosure to the tax authorities of tax matters of the
disclosing Party;
	 
	 	7.3.4	 	disclosure is made to the Parties’ professional advisers, provided that the
Parties require such professional advisers to comply with the provisions of Article 7.2
on the maintenance of the confidentiality of said information as if they were a party
to this Agreement;
	 
	 	7.3.5	 	the information is already in the public domain other than due to a breach of
this Agreement;
	 
	 	7.3.6	 	the other Party has given prior written approval for the disclosure or use
thereof; or

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	 	7.3.7	 	the information is independently developed by any of the Parties after
Completion of the Transfer of Equity Interest.

	8.	 	Transfer
	 
	 	 	No Party has the right to transfer any of said Party’s rights or interests hereunder without
the prior written consent of the other Parties.
	 
	9.	 	Governing Law and Dispute Resolution
	 
	9.1	 	Governing Law
	 
	 	 	This Agreement shall be governed by, and construed in accordance with,
the laws of the PRC.
	 
	9.2	 	Selection of Arbitration

	 	9.2.1	 	The Parties shall endeavor to resolve any disputes arising from, or in
connection with, this Agreement through amicable consultations. If the dispute cannot
be resolved through consultations within sixty (60) days from the date on which any
Party issues a notice to the other Parties, the dispute (including a dispute on the
validity or existence of this Agreement) shall be submitted to the Shanghai
Sub-commission of the China International Economic and Trade Arbitration Commission for
arbitration in accordance with said Commission’s arbitration rules in effect at the
time of the arbitration.
	 
	 	9.2.2	 	The arbitration award shall be final and binding on all the Parties, and shall
be enforced in accordance with relevant provisions.
	 
	 	9.2.3	 	The arbitration costs shall be borne by the losing Party or the Party
designated by the arbitration tribunal. If a Party is required to enforce the
arbitration award through any manner of Legal Action, the breaching Party shall pay all
reasonable expenses and expenditures, including but not limited to reasonable legal
fees and any additional litigation or arbitration expenses the non-breaching Party
incurs in enforcing the arbitration award.
	 
	 	9.2.4	 	While the dispute is pending, the Parties shall continue to fully perform this
Agreement, other than the matters under dispute.

	10.	 	Notices
	 
	10.1	 	All notices shall be made in Chinese and dispatched to the following addresses or fax numbers
(as the case may be) by hand, registered airmail or fax:
	 
	 	 	Redgate Media Ad Co., Ltd.
	 
	 	 	Address: 8th Floor, Tower B, CITIC Building, 19 Jianguomenwai Avenue, Beijing

Attn.: Ying Zhu

Telephone: 010-58692980

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	 	 	Fax: 010-58692960

	 	 	Weidong Zhu
	 
	 	 	Address: 2nd Floor, Block 1A, Lane 345, Xinhua Road, Shanghai

Telephone: 13901729948

Fax: 021-52540919
	 
	 	 	Shanghai Hongmen Advertising Co., Ltd.
	 
	 	 	Address: 2nd Floor, Block 1A, Lane 345, Xinhua Road, Shanghai

Attn: Yun Yang

Telephone: 021-62810161

Fax: 021-52540919

	10.2	 	Any notice, correspondence or document given or dispatched under this Article 10:

	 	10.2.1	 	shall, if delivered by hand with receipt of a written acknowledgement slip, be deemed
served, if delivered by no later than 5:00 pm on a Business Day in the place of
service, upon delivery at the relevant address on the strength of the written
acknowledgement of receipt; or shall, if delivered later than 5:00 pm on a Business Day
in the place of service or at any time on a non-Business Day in the place of service,
be deemed served at 9:00 am on the following Business Day in the place of service; or
	 
	 	10.2.2	 	shall, if dispatched by postage paid express domestic mail in the PRC, be deemed
served on the fifth (5th) Business Day following the date of consignment to
the post office; or
	 
	 	10.2.3	 	shall, if dispatched by postage paid international mail from or to any place outside
the PRC, be deemed served on the tenth (10th) Business Day following the
date of consignment to the post office; or
	 
	 	10.2.4	 	shall, if transmitted by fax, be deemed served upon transmission with a transmission
report confirming successful transmission and oral confirmation of receipt as proof
(the dispatcher shall record and sign the same in writing); however, if any notice
transmitted by fax is transmitted after 5:00 pm on any Business Day in the place of
receipt or at any time on a non-Business Day in said place, it shall be deemed served
at 9:00 am on the following Business Day in the place of receipt.

	10.3	 	Any Party shall have the right, at any time during the term hereof, to change its address or
fax number for the receipt of notices by giving written notice thereof to the other Parties.
	 
	11.	 	Costs
	 
	 	 	Each Party shall bear the Costs incurred by said Party in connection
with the negotiations for, and preparation and performance of, this
Agreement.

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	12.	 	Entire Agreement
	 
	12.1	 	This Agreement and all the agreements and/or documents referred to or expressly contained
herein constitute the entire Agreement among the Parties on the subject matter hereof, and
supersede all previous oral and written agreements, contracts, understandings and
correspondence among the Parties concerning the subject matter hereof.
	 
	12.2	 	For the purposes of this Agreement, the Parties shall take all necessary actions to apply for
the approvals of the relevant government authorities for the proposed Transfer of Equity
Interest and carry out the relevant business registration procedures, including but not
limited to the execution of all necessary documents (including the equity transfer agreement
shown in Schedule 4 hereto) required by the competent administration for industry and
commerce. If the execution of other agreements or any document is required in order to secure
the Government Approvals for the Transfer of Equity Interest hereunder or carry out the
procedures for the amendment of registration, the provisions or contents of such agreements or
documents shall be consistent with this Agreement. In the event of a discrepancy, this
Agreement shall prevail.
	 
	13.	 	Severability
	 
	 	 	If any provision hereof is found to be invalid or unenforceable, such provision shall not be
implemented (to the extent that it is invalid or unenforceable) and shall not be deemed a
part of this Agreement, but will not cause the other provisions hereof to become invalid.
The Parties shall use all reasonable efforts to replace the invalid or unenforceable
provision by a valid and enforceable substitute provision, and the validity of the
substitute provision shall, to the extent possible, be identical to the originally conceived
validity of the invalid or unenforceable provision.
	 
	14.	 	Waiver
	 
	 	 	The failure or delay by any Party in exercising any right or remedy hereunder shall not
operate as a waiver or modification of such right or remedy. The Parties rights and
remedies under, and those secured in accordance with, this Agreement are cumulative.
	 
	15.	 	Liability for Breach of Contract
	 
	 	 	If any Party breaches this Agreement, the breaching Party shall be liable to compensate for
the losses incurred to the non-breaching Parties as a result of the breach by the breaching
Party (where the Agreement is terminated, the breaching Party shall bear the Costs of the
non-breaching Party described in Article 11).

This Agreement is executed in Beijing, the PRC by the duly authorized representatives of the
Parties and is made in Chinese in six (6) originals, of which the Parties shall each hold one (1)
original and the remainder shall be used to carry out the procedures for the relevant Government
Approvals.

12

 

	 	 	 	 	 
	REDGATE MEDIA AD CO., LTD. [company seal]

 	 
	By:  	/s/ Yue Jin
 	 
	 	Name:  	Yue Jin 	 
	 	Title:  	Chairman of the Board 	 

	 	 	 	 	 
	WEIDONG ZHU

 	 
	Signature:  	/s/ Weidong Zhu
 	 

	 	 	 	 	 
	SHANGHAI HONGMEN ADVERTISING CO., LTD. [company seal]

 	 
	By:  	/s/ Yue Jin
 	 
	 	Name:  	Yue Jin 	 
	 	Title:  	Chairman of the Board 	 

13

 

	 	 	 	 	 

SCHEDULE 1.

BALANCE SHEET

[See Appendix 1 of Exhibit 10.4.2]

14

 

SCHEDULE 2.

WARRANTIES

	1.	 	Authority and Capacity of the Transferor and the Company
	 
	1.1	 	Details of Establishment and Power to Execute This Agreement
	 
	 	 	The Transferor and the Company have the lawful right and full power and authority to
execute and perform this Agreement and any other document executed by the Transferor in
accordance with, or related to, this Agreement, and once executed, such documents shall,
pursuant to their provisions, constitute valid and binding obligations on the Transferor
and the Company.
	 
	1.2	 	No Conflict
	 
	 	 	The execution of this Agreement by the Transferor and the Company, the performance by them
of their obligations hereunder and the execution by them of any other documents to be
executed in accordance with, or related to, this Agreement or their performance of their
obligations thereunder will not result in the breach of any agreement, Consent or other
document, or grant a third party the right to terminate or amend any agreement, Consent or
other document, or result in the violation of any judgment or ruling issued or rendered by
any court or government agency.
	 
	1.3	 	Registered Capital of the Company

	 	1.3.1	 	The Company’s registered capital has been paid in full.
	 
	 	1.3.2	 	The Transferor is the lawful holder of the Subject Equity, there is no dispute
in respect of its ownership of the Subject Equity and no party other than the
Transferor has any rights or interests in the Subject Equity.
	 
	 	1.3.3	 	The Transferor has the right to sell and transfer to the Transferee all of the
rights in the Subject Equity and does not require the consent of any third party (other
than Government Approvals) to do so.

	1.4	 	Business of the Company

	 	1.4.1	 	All activities carried out by the Company in respect of the Project, such as
the applications for, implementation and operation of, the Project, etc. comply with
the requirements of all relevant laws, statutes and policy documents (including but not
limited to the Regulations for the Administration of the Registration of Outdoor
Advertising (Order No. 25 of the State Administration for Industry and Commerce of the
People’s Republic of China; implemented from July 1, 2006), the Measures of Shanghai
Municipality for the Administration of Outdoor Advertising Facilities (Order No. 43 of
the Shanghai Municipal People’s Government; implemented from April 1, 2005) and the
Several Implementing Opinions of the Shanghai Municipal Administration for Industry and
Commerce on the Administration of the Registration of Outdoor Advertisements (ref. Hu
Gong Shang Guang [2006]

15

 

	 	 	 	No. 178; implemented from July 28, 2006)), and all necessary Government Approvals
and Consents therefor have been obtained.

	 	1.4.2	 	To date, the Company has completed the installation of no less than 800
mosquito repellent lamps and the affixing of advertisements on no less than 800
mosquito repellent lamps, and the approvals of the relevant government authorities have
been secured for the installation of the lamps and the affixing of advertisements.
Item 1.4.2 of the Disclosure Schedule sets forth all of the Government Approvals and
licenses that the Company has secured to date in respect of the Project (hereinafter
referred to as the “Approval Documents”, and include but are not limited to the Letter
Approving the Erection of Mosquito Repellent Lamps in Neighborhoods, Universities and
Colleges in Shanghai (ref. Hu Rong Huan Fa [2004] No. 283) issued by the Shanghai
Municipal Urban Appearance and Environmental Sanitation Administration on January 4,
2005, the Decisions of Shanghai Municipality Granting an Urban Appearance and
Environmental Sanitation Administrative Permit and the Construction Project Planning
Permits (Miscellaneous) secured by the Company in respect of all installed mosquito
repellent lamps, and the Outdoor Advertisement Registration Certificates secured for
all mosquito repellent lamps on which advertisements have been affixed), all such
Approval Documents are currently valid and correspond to each mosquito repellent lamp.
The Company has the right, pursuant to the Approval Documents, to continue to install
not less than 1,200 mosquito repellent lamps with advertisements and is responsible for
affixing the advertisements on such lamps so as to complete the Project, and is not
required to apply for any other Government Approvals. The relevant government
authorities have not imposed any time limits on the completion of the Project.
	 
	 	1.4.3	 	All of the location use rights secured by the Company for those mosquito
repellent lamps that have already been installed are lawful and valid, all lawful
authorizations have been secured for the advertisements that have been affixed thereon
and the same have been approved by the competent government agencies, item 1.4.3 of the
Disclosure Schedule sets forth all of the contracts, agreements, instruments and other
such relevant documents on the basis of which the Company secured the location use
rights for the mosquito repellent lamps and advertisement rights, all such documents
correspond to each of the mosquito repellent lamps, are currently valid and shall be
enforced pursuant to their provisions. Additionally, there are no circumstances that
are inconsistent or in conflict with any Approval Document.
	 
	 	1.4.4	 	The percentage of the total advertising area accounted for by public service
advertisements affixed by the Company on mosquito repellent lamps complies with the
requirements of any law, statute, government rule or regulation (including Approval
Documents), Consent, contract or other such instrument that is binding on the Company,
unless any such non-compliance would not have any adverse effect on the Company or the
Project.

16

 

	1.5	 	Options, Etc.
	 
	 	 	No person has the right to demand that the Company issue, sell or
transfer to him any equity interest. No Encumbrances exist on the
Company’s equity interests, nor are there any arrangements or
obligations in respect of Encumbrances, nor is the equity interest the
subject of any judicial preservation measures. The Company’s equity
interest is not the subject of any existing or potential legal dispute
or controversy.
	 
	1.6	 	Competing Rights and Interests
	 
	 	 	Neither the Transferor nor its Connected Persons hold any direct or
indirect rights and interests in any sector that competes or could
compete with the Company’s business.
	 
	1.7	 	Investments, Joint Ventures and Establishments
	 
	 	 	The Company has not invested in any other company, enterprise,
partnership, joint venture or in any organization, institution or
enterprise without legal personality, nor has it set up any
establishments, representative offices, places of business or resident
offices.

	2.	 	Accuracy and Sufficiency of the Information Disclosed to the Transferee
	 
	 	 	All of the information contained in this Agreement, and all other information given or
provided by the Transferor to the Transferee or any of its representatives, employees or
professional advisors during the negotiations for this Agreement or any background check or
other investigation conducted by the Transferee (or its representatives) prior to the
execution hereof was, at the time of provision, and continues to be true, complete, accurate
and not misleading in all respects. There are no facts, matters or circumstances that would
make any such information untrue, inaccurate or misleading that have not been disclosed to
the Transferee, and there are no facts, matters or circumstances that once disclosed would
reasonably affect the Transferee’s intent to purchase the Subject Equity or once disclosed
would reasonably affect the provisions on which the Transferee’s intent to purchase the
Subject Equity is based.
	 
	3.	 	Accounts and Records
	 
	3.1	 	Recent Accounts
	 
	 	 	The Company has prepared Accounts in accordance with PRC laws and the
PRC accounting rules, standards and practice commonly accepted as at
the execution date hereof so as to truthfully and fairly reflect its
assets, liabilities and business position as at the Balance Sheet
Date, as well as its profits or losses during the relevant periods and
has, in accordance with accounting practice, made provisions for bad
and questionable debts as at said date.
	 
	3.2	 	Company Accounts
	 
	 	 	The Company’s Accounts truthfully and fairly reflect the Company’s
assets and liabilities and business performance as at the date of the
Accounts, as well as its

17

 

	 	 	profits and losses during the relevant periods and, in accordance with accounting practice,
provisions have been made for bad and questionable debts as at said date.

	3.2	 	Profits
	 
	 	 	The Company’s profits reflected in the Accounts until the Balance Sheet Date, as well as the profit trends reflected in the
aforementioned Accounts have not been affected as a result of being recorded as non-recurring expenditures, unusual or
special transactions, or transactions reached on other than ordinary commercial terms or otherwise, thereby causing the
profit of all periods or any period to appear unusually large or small (except as reasonably disclosed in such Accounts).
	 
	3.3	 	Loans and Liabilities
	 
	 	 	The Company does not have any outstanding loan funds, has not carried out any financing that does not need to be shown or
reflected in the Accounts and has not borrowed any moneys that it has not repaid.
	 
	3.4	 	Changes Since the Balance Sheet Date (unless agreed in writing by the Transferee)
	 
	 	 	In respect of the Company since the Balance Sheet Date:

	 	3.4.1	 	there have not been any material adverse changes in its financial or trading
position, or prospects or turnover, nor are there any events, facts or matters that
have occurred or could occur that will or could give rise to such change;
	 
	 	3.4.2	 	it has conducted its business in the ordinary or usual fashion, there has not
been any interruption or change in the nature, scope or method thereof, and its
operations have maintained continuity;
	 
	 	3.4.3	 	it has not agreed on any transactions other than in the ordinary course of
business, or borne or given rise to any liability (including contingent liability) or
made any payments not recorded in the Accounts;
	 
	 	3.4.4	 	its profits have not been affected by any change or inconsistency of
accounting treatment, any non-recurring receipt or expenditure, an abnormal or unusual
transaction, or a transaction reached on other than ordinary commercial terms or any
other factor that has caused the profits to appear unusually high or low;
	 
	 	3.4.5	 	its business has not been materially adversely affected by the loss of any key
client or any anomalous factor that would affect a similar business to such an extent,
nor are there any facts that could give rise to such an effect; for the purposes of
this paragraph, the term “key client” of the Company means a client that, prior to the
Balance Sheet date, accounted for at least 5 percent of the Company’s turnover;
	 
	 	3.4.6	 	except as specified in the Accounts, it has not declared, made or paid any
dividends or other distributions to shareholders;
	 
	 	3.4.7	 	it has not reduced or agreed to reduce its registered capital;

18

 

	 	3.4.8	 	there have not been any refusals to pay an insurance claim or a settlement for
less than the claim amount;
	 
	 	3.4.9	 	as compared to the circumstances disclosed in the Accounts, there have not
been any material adverse changes in the relationship with the clients of the business
described therein, the business described therein, the Company’s financial position,
current circumstances, prospects, assets or liabilities, nor has there been any damage,
destruction or loss (whether insured or not) affecting the business described therein
or its assets;
	 
	 	3.4.10	 	the Company has not acquired, sold, transferred or otherwise disposed of any manner
of asset, or cancelled, relinquished, released or discounted all or part of any
liability or claim, except as done in the ordinary course of business;
	 
	 	3.4.11	 	the Company has not relinquished or terminated any right of material or substantive
value;
	 
	 	3.4.12	 	the Company has not made any capital expenditures or capital commitments the total
amount of which exceeds RMB1 million;
	 
	 	3.4.13	 	the Company has not adopted any resolutions that could materially reduce its net
asset value nor has it done anything in the handling or management of its affairs that
could materially reduce its net asset value; and
	 
	 	3.4.14	 	other than the existing liabilities and obligations arising under contracts entered
into in the ordinary course of business, the Company does not have any liabilities or
obligations (whether absolute or contingent).

	4.	 	Legal Matters
	 
	4.1	 	Compliance with Laws
	 
	 	 	The Company has not, in the past or in the present, violated PRC laws
in the business or operations that it engages in. The Company has
never breached nor is it currently in breach of its organizational
documents. Since its establishment, no court, arbitrator, government
agency or regulator has investigated or conducted an inquiry into, nor
is currently investigating or conducting an inquiry into the Company,
nor are there any pending or foreseen rulings, awards, decisions or
judgments, nor has it received any notice or other communication
(whether given or made formally or otherwise) issued by a court,
arbitrator, government agency or regulator concerning a third party
accusing it of any actual or potential violation and/or failure to
comply with a law or its organizational document or requiring it to
carry out or refrain from carrying out any act.
	 
	4.2	 	Consents and Approval Documents
	 
	 	 	All Consents have been secured and are fully valid and have been or
are being complied with. There are no pending or foreseen
investigations or inquiries that could result in the suspension,
cancellation, amendment or revocation of any Consent. No

19

 

	 	 	Consent has been breached, and there is no possibility that any such Consent could be
suspended, cancelled, refused, amended or revoked (regardless of whether due to the
execution or performance hereof or otherwise).

	4.3	 	Legal Actions and Disputes

	 	4.3.1	 	The Company has not received any claims for damages or other claims.
	 
	 	4.3.2	 	Neither the Company (nor any person whose acts or breaches of contract the
Company is required to bear liability for) is involved in any claim, legal action,
legal procedure, litigation, accusation, investigation, inquiry or arbitration (whether
as plaintiff, defendant or other concerned party), nor is there any pending or imminent
claim, legal action, legal procedure, litigation, accusation, investigation, inquiry or
arbitration directed by the Company (or any person whose acts or breaches of contract
the Company is required to bear liability for) against a third party, or directed by a
third party against the Company (or any person whose acts or breaches of contract the
Company is required to bear liability for), or in respect of the Company’s assets.
	 
	 	4.3.3	 	There is no investigation, administrative penalty, enforcement measure or
otherwise against the Company in respect of a claim, legal action, legal procedure,
litigation, accusation, investigation, inquiry or arbitration that could give rise to a
dispute or controversy.
	 
	 	4.3.4	 	The disputes disclosed by the Company will not have a material adverse effect
on its ordinary operations.
	 
	 	4.3.5	 	In particular, but without prejudice to the generality of the preceding
paragraph, there is no dispute between the Company and any client or employee with
respect to the Company’s facilities or work, or any loss, damage or personal injury
arising in connection therewith.
	 
	 	4.3.6	 	There is no existing and unresolved judgment, court order, arbitration
tribunal or arbitration award against the Company, and none of its business or assets
is subject to any seizure, enforcement or procedure.

	4.4	 	Bankruptcy

	 	4.4.1	 	No ruling has been rendered, application filed, resolution adopted or meeting
convened for the dissolution or bankruptcy of the Company (or other procedure such as
the closing down of the Company’s operations, or distribution of the Company’s assets
to creditors and/or its shareholders or other investors). There is no case or legal
procedure for the bankruptcy or restructuring of the Company and no event has occurred
that, pursuant to PRC laws, could provide a legal basis for any such case or legal
procedure.
	 
	 	4.4.2	 	The Company is not insolvent or unable to discharge debts that are due.

20

 

	5.	 	Transactions and Contractual Arrangements
	 
	5.1	 	Capital Commitments
	 
	 	 	The Company has not made and does not propose to give any capital commitments.
	 
	5.2	 	Arrangements with Connected Persons

	 	5.2.1	 	There are no debts (actual or contingent) or any compensation, guarantee or
security arrangements between the Company and the Transferor or any of its Connected
Persons.
	 
	 	5.2.2	 	The Company is not and has never been a party to any contract, arrangement or
understanding (i) executed with the Transferor or any of its Connected Persons; or (ii)
in which the Transferor or any of its Connected Persons has an interest (direct or
indirect).
	 
	 	5.2.3	 	There currently are no contracts or arrangements between or among the Company
and/or the Transferor and/or any of its Connected persons.

	5.3	 	Arrangements with Interested Persons

	 	5.3.1	 	There are no debts (actual or contingent) or any compensation, guarantee or
security arrangements between the Company and any current or former employee or
director or any current or former advisor or any person having a connection with the
aforementioned persons.
	 
	 	5.3.2	 	The Company is not and has never been a party to any contract, arrangement or
understanding (i) executed with any current or former employee or director or any
current or former advisor or any person having a connection with the aforementioned
persons; or (ii) in which any current or former employee or director or any current or
former advisor or any person having a connection with the aforementioned persons has an
interest (whether direct or indirect).
	 
	 	5.3.3	 	There currently are no contracts or arrangements between the Company and/or
any current or former employee or director or any current or former advisor or any
person having a connection with the aforementioned persons.

	5.4	 	Effect of the Transfer of Equity Interest
	 
	 	 	The execution, compliance with and completion of this Agreement shall
not and will not cause the Company to lose the rights or benefits that
it currently enjoys as a result of any preferential arrangement; or
cause any person with whom the Company conducts ordinary business
dealings or that gives the Company credit to discontinue conducting
business dealings with the Company or discontinue giving the Company
credit on the same basis; or cause any of the Company’s directors or
senior officers to resign. The attitudes or actions of clients,
employees and other persons toward the Company shall not be adversely
affected as a result thereof.

21

 

	5.5	 	Contracts

	 	5.5.1	 	The Company is not and has never been a party to a contract, arrangement,
undertaking or arrangement as set forth below:

	 	(i)	 	a contract, arrangement or undertaking outside the ordinary
course of business;
	 
	 	(ii)	 	a contract, arrangement or undertaking not entirely reached on
an equitable and commercial basis;
	 
	 	(iii)	 	a loss-making contract, arrangement or undertaking (i.e. one
that is known to potentially result in a loss once performed);
	 
	 	(iv)	 	a contract, arrangement or undertaking that would be
impossible, without difficulty, to complete or perform on schedule without the
commitment of particularly large or unusual expenditures or efforts;
	 
	 	(v)	 	a contract, arrangement or undertaking not executed by the
Company as a party but that is, in fact, being performed by the Company; or
	 
	 	(vi)	 	other than as disclosed to Transferee in the Disclosure
Schedule, a consent to become a member of any joint venture, consortium,
partnership or other organization without legal personality (other than a
recognized industry association).

	 	5.5.2	 	No contract, obligation, agreement or arrangement to which the Company is a
party or which is binding on the Company is invalid, unlawful, unenforceable, or
requires registration or amendment as a result of the provisions of a law or statute or
as a result of a conflict with a law or statute.
	 
	 	5.5.3	 	No agreement involving the Company may be or has been terminated and no rights
of any person thereunder may be or have been materially adversely affected due to a
change in the control of the Company or a change in the composition of the Board.

	5.6	 	Compliance with Agreements
	 
	 	 	Item 5.6 of the Disclosure Schedule sets forth all of the currently valid contracts or
agreements with a value greater than or equal to RMB500,000 to which the Company is a party.
All contracts to which the Company is a party and all agreements of any nature regarding
the installation of mosquito repellent lamps with advertisements, media leases, erection of
advertising billboards and the publication of advertisements inure to the benefit of, are
binding on and are enforceable against the relevant parties, and the Company and all other
parties have complied with such agreements. There are no grounds for the termination,
avoidance or rescission of any contract or such agreements, the Company has not received any
notice concerning the termination or an intent to terminate any of the aforementioned
documents and is neither in arrears in the payment of nor has it failed to pay any contract
amount that is due and payable.

22

 

	 	 	In particular, but without prejudice to the generality of the preceding paragraph, the
cooperation arrangement specified in the cooperation agreement executed by the Company with
Shanghai Pest Control Co., Ltd. is exclusive and irrevocable, and any discrepancies between
the provisions thereof (including provisions on the area of light box public service
advertisements) and the Government Approvals (including Approval Documents), Consents,
contracts and other such instruments binding on the Company will not affect the validity of
the cooperation agreement or have an adverse effect on the Company.
	 
	5.7	 	Security

	 	5.7.1	 	There are no outstanding guarantees, indemnities, security or consolation
(whether legally binding or not) made or given by the Company or of which the Company
is the beneficiary.
	 
	 	5.7.2	 	Neither the Company nor its representatives have provided, made or given rise
to any loan, guarantee, pledge, mortgage, lien, bonds, Encumbrances or unusual debts,
neither the Company nor its representatives have provided any loans to any of the
Company’s directors or shareholders nor have directors or other persons provided any
guarantees or security for any of the Company’s finances or other obligations.

	6.	 	Employees, Etc.
	 
	6.1	 	Employees and Terms of Employment

	 	6.1.1	 	All of the agreements and arrangements concerning the engagement of the
Company’s directors and senior management personnel have been executed by the relevant
parties on a fair commercial basis, and the terms thereof are, as compared with
commonly accepted market practice in the PRC, fair and reasonable.
	 
	 	6.1.2	 	There are no provisions in any of the terms of employment for the Company’s
employees, or in the Company’s consulting agreements or in the terms of appointment of
the Company’s directors that would grant such employees, advisors or directors the
right to deem a change in the Company’s control or shareholders (the term “control”
shall be defined in such relevant documents, if any) as a breach of contract, or the
right to receive any payment or other benefit, or that would cause them to deem
themselves as having been dismissed or as having been released from any obligation.
	 
	 	6.1.3	 	There are no past, present, threatened or imminent disputes between the
Company and any class of employees, and there are no arrangements between the Company
and any labor union or organization that represents said class of employees.
	 
	 	6.1.4	 	The Company has not been required and there is no possibility that it shall be
required to pay compensation in respect of the dismissal of a former employee, and the
Company has not been required and there is no possibility that it shall be required to
rehire or reinstate a former employee.

23

 

	6.2	 	Amounts Payable Upon Termination of Employment Contracts
	 
	 	 	Other than as disclosed in the Accounts:

	 	6.2.1	 	the Company has never incurred liability and there is no possibility that it
shall incur liability as a result of breaching any employment or consulting contract
with any employee or advisor, including but not limited to payment of compensation for
dismissal, damages for illegal termination of an employment contract, failure to comply
with a ruling on reinstatement or rehiring rendered in favor of any employee; and
	 
	 	6.2.2	 	in respect of the proposed termination or suspension of the employment of any
employee or former employee, or the amendment of such employee’s or former employee’s
employment contract or the amendment of any advisor’s or former advisor’s consulting
contract, the Company has not paid or agreed to pay to said employee, former employee,
a person supported by him, advisor or former advisor any moneys, nor has it provided or
agreed to provide any benefits.

	6.3	 	Labor-Management Disputes
	 
	 	 	The Company is not involved (nor are there any circumstances that
could result in its being involved) in any labor-management dispute,
or in any dispute or negotiations in respect of a certain material
claim with any labor union, employee association or other organization
or body that represents employees.
	 
	6.4	 	Incentive System
	 
	 	 	The Company does not have any equity incentive, stock option, profit
sharing or other similar incentive arrangement that involves the
Company and any employee or former employee.
	 
	6.5	 	Social Insurance

	 	6.5.1	 	The Company has not breached any of its obligations to pay Social Insurance on
behalf of its employees.
	 
	 	6.5.2	 	Other than Social Insurance, there are no pension, welfare fund or retirement
benefit funds, schemes or arrangements that would obligate (whether morally or
contractually) the Company to provide any similar manner of retirement benefits (which
term shall include benefits payable in connection with retirement, resignation, death
or disability and any other benefits usually provided with fund or retirement schemes)
to any employees, workers, former employees, their spouses or other relatives.

	7.	 	Taxes and Levies
	 
	7.1	 	The Company has never participated in any transactions outside the ordinary course of its
business that has caused or shall cause it to incur a tax obligation (or, if a

24

 

	 	 	remedy, reduction, exemption, deduction or credit is not provided, would or could give rise
to such an obligation).

	7.2	 	Since its establishment, the Company has not been involved in any major tax-related disputes
with the tax authorities, all tax breaks and financial subsidies that it has enjoyed were
lawfully obtained and there is no possibility that it will be required to pay back taxes, or
interest thereon, or return the subsidies and bear the attendant liability.
	 
	7.3	 	The Company has punctually paid all taxes and government charges, made all filings, issued
all notices and provided all other information that it is required to provide to any tax
authority or other government agency by the deadlines specified in relevant laws. All such
information is complete and accurate in all material respects; and all filings and notices are
complete and accurate in all material respects and were made and issued on the appropriate
basis. The Company is not required to pay any back taxes, pay surtaxes or accept other tax
investigations, there are no facts that could trigger such an investigation nor has it
received nor has there been given any notice for the recovery taxes from the Company by any
third party or of a dispute concerning any tax break provided to the Company. The Company is
not nor has it ever been liable to pay interest on outstanding taxes.
	 
	7.4	 	The execution or performance hereof will not:

	 	7.4.1	 	cause the Company to incur any loss, or cause any reduction, exemption,
deduction or credit provided in respect of the Company’s profits, income or revenues
(or amounts treated as profits, income or revenues) for the purpose of reducing or
exempting taxes to no longer be provided or the amount thereof to be reduced; or
	 
	 	7.4.2	 	cause the Company to be obligated to pay any tax or additional tax.

	8.	 	Assets
	 
	8.1	 	Title to Assets

	 	8.1.1	 	All of the Company’s assets were entirely the Company’s property as at the
Balance Sheet Date. (Other than those that will be disposed of or repaid in the
ordinary course of business in future), all such assets as well as all assets and
liabilities acquired or arising in future are or will entirely be the Company’s
property, are not the subject of any transfer or Encumbrance (other than liens legally
arising in the ordinary course of business) and are not the subject of any installment
payment, conditional sale or credit sale agreement.
	 
	 	8.1.2	 	All such assets are occupied (if they can be so occupied) by the Company or
under the Company’s control, or the Company has the right to occupy or control the
same. All such assets are located in the PRC.
	 
	 	8.1.3	 	The Company does not own any rights or interests in land or real property.
However, it does have valid and binding lease interests, such lease interests

25

 

	 	 	 	are intact and free and clear of any Encumbrances and no third party has asserted
that it has rights or interests of greater priority in such lease interests.

	 	8.1.4	 	Item 8.1 of the Disclosure Schedule gives a list of all of the immovable
assets and movable assets leased or used by the Company. With respect to the property
or assets leased by the Company that have a substantive connection with its operations,
the Company is in compliance with the lease terms therefor, has valid lease interests
in such assets, and they are free and clear of any liens, Encumbrances or security
interests or of claims by any third party other than the lessor of such property or
assets.

	8.2	 	Sufficiency of Assets
	 
	 	 	The assets owned or leased by the Company constitute all of the
property, rights and assets required by it to fully and effectively
carry on its existing business or to facilitate its engagement in
business.
	 
	8.3	 	Insurance

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

	 	(i)	 	to date, the Company has punctually paid all premiums;
	 
	 	(ii)	 	the insurance taken out by the Company on leased immovable
assets is presently valid, and if the Company is responsible for renewing such
insurance, such insurance policies satisfy the requirements in respect of the
lease of any immovable assets in all respects;
	 
	 	(iii)	 	all insurance policies are fully valid; neither the Company
nor the Company’s representative has committed any act or omission, made an
erroneous representation or failed to disclose an event that could render such
insurance policies revocable, or undertaken any action that could render such
insurance polices invalid or unenforceable due to a violation of the law or
other reason, or undertaken any action that breaches the terms, conditions or
warranties of any insurance policy thereby giving the insurance company the
right to refuse to pay all or part of any claim under such policy;
	 
	 	(iv)	 	with respect to each insurance policy, there are no special or
unusual limitations, terms, exceptions or restrictions, the premiums payable do
not exceed the standard premium rates and there are no circumstances existing
that could cause an increase in the premiums; and

26

 

	 	(v)	 	the Company does not have any outstanding claims, and no
circumstances exist that could give rise to any claim.

	8.4	 	Subsidies
	 
	 	 	The Company has never applied for nor has it ever received from a
government agency, local agency, state agency or local authority any
investment, subsidy, loan subsidy or financial assistance.
	 
	8.5	 	No Undisclosed Debts
	 
	 	 	Other than (i) the debts disclosed or listed in the Accounts; (ii)
debts incurred in the ordinary course of business after the Balance
Sheet Date (the foregoing two items have no material adverse effect on
the Company’s financial or trading position, prospects or turnover);
or (iii) debts disclosed in this Agreement, the Company does not have
any debts.
	 
	9.	 	Intellectual Property
	 
	9.1	 	Title
	 
	 	 	All Intellectual Property rights (the Company shall set forth in item
9.1 of the Disclosure Schedule all registered Intellectual Property
and all Intellectual Property the registration of which it is
currently applying for, and give a brief description of the salient
points thereof) that are being or can be used in the Company’s
business, that are required for the Company’s business or are relevant
to the Company’s business and all of the relevant applications for the
registration thereof:

	 	9.1.1	 	are or will be lawfully owned by the Company as beneficiary thereof, or are
lawfully used with the consent of or pursuant to a license from the rights owner;
	 
	 	9.1.2	 	are valid and enforceable;
	 
	 	9.1.3	 	have not been infringed upon, challenged or opposed;
	 
	 	9.1.4	 	are not subject to any Encumbrance provided to a third party or any Consent or
authorization;
	 
	 	9.1.5	 	with respect to the rights in the aforementioned registered Intellectual
Property or to the Intellectual Property the registration of which is currently being
applied for that is set forth and a brief description of the salient points of which is
given on the asset list in the Disclosure Schedule, the registration renewal fee for
those that have expired has been paid and all measures required to maintain and protect
the aforementioned Intellectual Property rights have been taken; and
	 
	 	9.1.6	 	no claim has been lodged nor are there any pending applications such that, in
the event that such claim is lodged or such application is approved, the
truthfulness and accuracy of any of the foregoing provisions would be materially
affected.

27

 

SCHEDULE 3.

DISCLOSURE SCHEDULE

[None]

28

 

SCHEDULE 4.

EQUITY TRANSFER AGREEMENT (FOR BUSINESS REGISTRATION)

29

 

Equity Transfer Agreement

The Agreement (“Agreement”) was
executed on the day
           
of           ,           in Shanghai,
China by and among the following parties:

	(1)	 	Redgate Media AD Co., Ltd., a limited liability company incorporated and existing
under the laws of China, with its registered address at Room 1807, 15/F, South Tower of
Building B, Jianwai SOHO, No.39 East 3rd Ring Road Central, Chaoyang District,
Beijing, China (“Transferee”);
	 
	(2)	 	Weidong Zhu, a Chinese citizen with his ID card No.: 310110197006105018
(“Transferor”);
	 
	(3)	 	Shanghai Hongmen Advertising Co., Ltd., a limited liability company incorporated and existing
under the laws of China, with its registered address at P-1 Building, No. 7523 Beiqing Road,
Zhonggu Town, Qingpu District, Shanghai, China (“Company”).

(The Transferee, Transferor and the Company are hereinafter collectively referred to as the
“Parties” and individually referred to as a “Party”.)

The registered capital of the Company is RMB6,410,000, of which the Transferor contributed
RMB3,150,000, accounting for 49.14%. It is agreed as follows through amiable negotiation in
accordance with pertinent laws and regulations:

Article 1 Equity Transfer

1.1 Transferor shall transfer 0.15% equity interest of the Company held by it to the Transferee at
the cost of RMB10,000.

1.2 The rights attached to the Equity Interest shall be transferred along with the Equity Interest.

1.3 The Transferee shall pay the transfer price to the Transferor as agreed upon with Transferor.

Article 2 Warranties and Undertakings

30

 

2.1 The Transferor undertakes to the Transferee that the equity interest to be transferred is true,
reliable and complete.

2.2 Transferor undertakes to Transferee that it has full rights, powers and capabilities of act for
equity transfer, free of fraud.

Article 3 Liability for Breach of Contract

Each party in breach of the Agreement shall assume the corresponding liability for breach of
contract.

Article 4 Methods of Dispute Settlement

Any and all disputes arising from the performance of the Agreement shall be settled through amiable
negotiation; where negotiation fails, any party may apply to China International Economic and Trade
Arbitration Commission Shanghai Sub-commission for arbitration.

Article 5 Miscellaneous

5.1 The Agreement shall be made in four (4) copies, one for each party and the other for the
Company for the purpose of completion of relevant procedures.

5.2 The Agreement shall take effect with signatures of the Parties.

[Execution page below]

31

 

[Execution Page]

	 	 	 	 	 
	Redgate Media AD Co., Ltd. (seal)

 	 	 
	Signature:  	 	 	 
	 	Name:  	Yue Jin 	 	 
	 	Title:  	Chairman 	 	 
	 
	Weidong Zhu

 	 	 
	Signature:  	 	 	 

	 	 	 	 	 
	Shanghai Hongmen Advertising Co., Ltd. (seal)

 	 	 
	Signature:  	 	 	 
	 	Name:  	Yue Jin 	 	 
	 	Title:  	Chairman 	 	 

32

 

Appendix VI

Form of Non-competition Agreement (to be signed by and among the Investors, the Company

and Weidong Zhu)exv10w4w5

	 	 	 
	

	 	Exhibit 10.4.5
	 
	 
	[Translation of Chinese original]

	 	Execution Version

 

Capital Increase Agreement

Of

Shanghai Hongmen Advertising Co., Ltd.

 

By and among

Pacific Asia Mode Cube Limited

Redgate Media AD Co., Ltd.

Weidong Zhu

Shanghai Aoxue Advertising Broadcasting Co., Ltd.

And

Shanghai Hongmen Advertising Co., Ltd.

Date: December 19, 2007

Shanghai Office

King & Wood PRC Lawyers

Capital Increase B

 

 

Table of Contents

	 	 	 	 	 	 	 	 
	Article         Heading	 	Page	 
	1.	 	 	Definitions
	 	 	1	 
	2.	 	 	Capital Increase
	 	 	3	 
	3.	 	 	Conditions Precedent
	 	 	4	 
	4.	 	 	Undertakings
	 	 	6	 
	5.	 	 	Completion of Capital Increase
	 	 	7	 
	6.	 	 	Equity Transfer and Pledge
	 	 	8	 
	7.	 	 	Representations and Warranties
	 	 	8	 
	8.	 	 	Provision of Information Materials
	 	 	8	 
	9.	 	 	Confidentiality
	 	 	9	 
	10.	 	 	Assignment
	 	 	9	 
	11.	 	 	Liabilities for Breach of Contract
	 	 	10	 
	12.	 	 	Effectiveness, Amendment and Termination
	 	 	10	 
	13.	 	 	Force Majeure
	 	 	10	 
	14.	 	 	Governing Law and Dispute Settlement
	 	 	11	 
	15.	 	 	Notice
	 	 	11	 
	16.	 	 	Expenses
	 	 	13	 
	17.	 	 	Entire Agreement
	 	 	13	 
	18.	 	 	Severability
	 	 	13	 
	19.	 	 	Waiver
	 	 	13	 
	Appendix I	 	Basic Information of the Company
	 	 	1	 

 

 

This Capital Increase Agreement (hereinafter referred to as “the Agreement”) is signed by
the following parties in Beijing, the People’s Republic of China (hereinafter referred to as “China”) on the date of December 19, 2007, in accordance with the Company Law of the
People’s Republic of China, the Regulations on the Merger with or Acquisition of Domestic
Enterprises by Foreign Investors and other applicable laws, regulations and rules of China:

	(1)	 	Pacific Asia Mode Cube Limited, a company duly established and existing under the laws of
Hong Kong, with its registered address at Room 2703, 27/F, The Centrium, 60 Wyndham Street,
Central, Hong Kong SAR, China (hereinafter referred to as “Investor”);
	 
	(2)	 	Shanghai Hongmen Advertising Co., Ltd., a limited liability company duly established and
existing under the laws of China, with its registered address at P-1 Building, No. 7523
Beiqing Highway, Chonggu Town, Qingpu District, Shanghai, China (hereinafter referred to as “Company”);
	 
	(3)	 	Redgate Media AD Co., Ltd., a limited liability company duly established and existing under
the laws of China, with its registered address at Room 1807, 15/F, Tower B, Jianwai SOHO, No.
39 East 3rd Ring Road Central, Chaoyang District, Beijing, China (hereinafter referred to as “Redgate”);
	 
	(4)	 	Weidong Zhu, a Chinese citizen, with the ID Card number of 310110197006105018; and
	 
	(5)	 	Shanghai Aoxue Advertising Broadcasting Co., Ltd., a limited liability Company duly
established and existing under the laws of China, with its registered address at Building G,
No. 10 Jinwen Road, Zhuqiao Town, Nanhui District, Shanghai, China.
	 
	 	 	Redgate, Weidong Zhu and Shanghai Aoxue Advertising Broadcasting Co., Ltd. are collectively
referred to as “Existing Shareholders”, and Weidong Zhu and Shanghai Aoxue Advertising
Broadcasting Co., Ltd. are collectively referred to as “Original Shareholders”.
	 
	 	 	(The parties hereto are hereinafter collectively referred to as the “Parties”, and
individually referred to as a “Party”.)

WHEREAS:

	(A)	 	The Company is an enterprise duly established and validly existing under the laws and
specialized in the business of design, production, publication and agency of advertisements,
production of images and documents, and planning of corporate images (refer to Appendix I for
the basic information of the Company);
	 
	(B)	 	With the approval of the shareholders’ meeting of the Company, the initial registered capital
of the Company shall be increased from RMB6,410,000 to RMB7,850,964 and the Investor agrees to
subscribe for the increased capital in accordance with the terms and conditions of this
Agreement;
	 
	(C)	 	The Parties agree to transform the Company into a Sino-foreign joint venture (hereinafter
referred to as “Joint Venture”) through the capital increase and jointly manage and operate
the Joint Venture in accordance with the Joint Venture Contract (as defined below) and the
Restated Articles of Association (as defined below) signed by the Parties; and
	 
	(D)	 	The Parties agree to make some commitments in accordance with this Agreement.

NOW, THEREFORE, the Parties hereby enter into the following agreement regarding the capital
increase:

	1.	 	Definitions
	 
	1.1	 	For the purpose of this Agreement, the following terms shall have the meanings defined below:

1

 

	 	 	“Change” shall refer to the transformation of the Company into a Joint Venture in accordance
with the duly approved Joint Venture Contract and the Restated Articles of Association;
	 
	 	 	“Encumbrance” shall refer to the mortgage, pledge, lien, option and preemptive right (except
the statutory preemptive right owned by the Existing Shareholders on the equity interest of
the Company prior to the Change) or any kind of security interest;
	 
	 	 	“Expenses” shall refer to any kind of liabilities, losses, damages, costs (including legal
costs) and expenses (including taxes);
	 
	 	 	“Administration for Industry and Commerce” shall refer to the PRC State Administration for
Industry and Commerce and all the local agencies authorized by it for the company
registration;
	 
	 	 	“Related Party”, with respect to a Party, shall refer to any company, partnership or any
other entity directly or indirectly controlling the Party, directly or indirectly controlled
by the Party or directly or indirectly under common control with the Party; if it is an
individual, it shall refer to his/her spouse or relative. (For the purpose of this
definition, “Control” shall refer to having the control over the Party directly or
indirectly by holding the voting equity of the Party or through agreement or any other
arrangement);
	 
	 	 	“Equity Transfer” shall refer to that Redgate acquires and subscribes for the increased
capital and holds 51.01% equity interest of the Company in accordance with Transfer
Agreement A and Transfer Agreement B, and Shanghai Aoxue Advertising Broadcasting Co., Ltd.
acquires and holds 18.37% equity interest of the Company in accordance with Transfer
Agreement C;
	 
	 	 	“Joint Venture Contract” shall refer to the Joint Venture Contract regarding the Joint
Venture signed by the Investor and the Existing Shareholders on the date of this Agreement;
	 
	 	 	“USD” shall refer to the legal currency of the United States of America;
	 
	 	 	“Mosquito-Control Light Box Project” shall refer to the project of 1,500 ~ 2,000
mosquito-control light boxes to be installed in Shanghai’s colleges, universities and
communities in two phases, one prior to June 2006 and the other as approved by the relevant
government authority, that was launched in 2004;
	 
	 	 	“Renminbi” or “RMB” shall refer to the legal currency of China;
	 
	 	 	“Tax” shall refer to any tax payable (including but not limited to any income tax, business
tax, stamp duty or any other tax, duty, charge, fee, deduction, fine or withholding levied,
charged or imposed). “Taxation” shall be interpreted accordingly;
	 
	 	 	“Lawsuit” shall refer to any claim, legal action, legal proceedings, suit, action,
prosecution, investigation, inquiry or arbitration involved with the Company (other than
those actions arising from the normal business operation of the Company for recovery of
debts, where the Company acts as the plaintiff);
	 
	 	 	“Conditions Precedent” shall refer to the conditions described in Article 3.1 hereof;
	 
	 	 	“Business Day” shall refer to the business day on which the banks in China and Hong Kong are
open to the public (except Saturday, Sunday and public holidays);
	 
	 	 	“Restated Articles of Association” shall refer to the amended articles of association of the
Company signed by the Investor and the Existing Shareholders in accordance with this
Agreement and the Joint Venture Contract on the date of the Agreement;
	 
	 	 	“Government Approvals” shall refer to all approvals, registrations and filing from and with
the relevant departments of the Chinese Government (including the local governments)
required for this Agreement, the Joint Venture Contract, the Restated Articles of
Association and the Change;

2

 

	 	 	“China”, for the purpose of this Agreement, shall refer to mainland China, excluding Hong
Kong SAR, Macau SAR and Taiwan;
	 
	 	 	“Key Management Personnel” shall refer to Weidong Zhu (General Manager) and Yun Yang
(Director of the Business Expansion Department);
	 
	 	 	“Equity Transfer Agreements” shall refer to the Transfer Agreement A, the Transfer Agreement
B and Transfer Agreement C entered into on the date of this Agreement, among which, “Equity
Transfer Agreement A” shall refer to the Transfer Agreement signed by the Investor, Redgate,
Weidong Zhu , the Company and Shanghai Yuqing Advertising Co., Ltd. (“Yuqing”) regarding the
transfer of 39.42% equity interest of the Company from Yuqing to Redgate and subscription
for an increased capital of RMB1,210,000 by Redgate (“Capital Increase A”); “Equity Transfer
Agreement B” shall refer to the Transfer Agreement signed by the Investor, Redgate, the
Company and Weidong Zhu regarding transfer of 0.15% equity interest of the Company (on the
basis of the dilution of Capital Increase A) from Weidong Zhu to Redgate; and “Equity
Transfer Agreement C” shall refer to the Transfer Agreement signed by Shanghai Aoxue
Advertising Broadcasting Co., Ltd., Weidong Zhu and the parties concerned regarding transfer
of 18.37% equity interest of the Company (on the basis of the dilution of Capital Increase
A) from Weidong Zhu to Shanghai Aoxue Advertising Broadcasting Co., Ltd.;
	 
	 	 	“Capital Increase” shall refer to the activities of capital increase where the Investor
makes its contribution to the Company for the capital increase and the Company issues the
relevant documents to the Investor in accordance with the terms and documents of Article 5
hereof;
	 
	 	 	“Capital Increase Amount” shall refer to the total amount of subscribed capital increase
(RMB15,000,000) payable by the Investor to the Company in accordance with Article 2.3
hereof;
	 
	 	 	“Completion of Capital Increase” shall refer to the confirmation by the Parties that the
Conditions Precedent are fulfilled or waived in accordance with Article 5.4 hereof; and
	 
	 	 	“Completion Date of Capital Increase” shall refer to the date on which the Parties
confirm that the Conditions Precedent are fulfilled or waived in accordance with Article 5.4
hereof.
	 
	1.2	 	Headings
	 
	 	 	The headings of all articles are for the reference only and shall not affect the
interpretation of this Agreement.
	 
	1.3	 	Reference
	 
	 	 	Reference to “Laws of China” herein shall include any and all laws, regulations, and
policies with legal effect or any other supplemental legislation within this
jurisdiction. Reference to “Law” herein shall include any and all amendments or
modifications thereto from time to time. Reference to “the Agreement” or any contract
herein shall include any and all amendments or modifications hereto or updates hereof
from time to time.
	 
	1.4	 	Appendices
	 
	 	 	All appendices as listed in the Table of Contents hereof constitute an integral part of this
Agreement.
	 
	2.	 	Capital Increase
	 
	2.1	 	The Investor agrees to complete the Capital Increase of the Company and transform the Company
into a Joint Venture in accordance with the terms and conditions hereof.
	 
	2.2	 	The initial registered capital of the Company is RMB6,410,000 and the shareholding is as
follows:

3

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage in the
	 	 	Amount of Capital	 	Registered Capital
	Name of Shareholders	 	Contributed (RMB)	 	(%)
	Redgate Media AD Co., Ltd.
	 	 	3,269,615	 	 	 	51.01	%
	Weidong Zhu
	 	 	1,962,741	 	 	 	30.62	%
	Shanghai Aoxue
Advertising Broadcasting
Co., Ltd.
	 	 	1,177,644	 	 	 	18.37	%
	 
	 	 	 	 	 	 	 	 
	Total
	 	 	6,410,000	 	 	 	100.000	%
	 
	 	 	 	 	 	 	 	 

	 	 	Upon completion of the Capital Increase, the registered capital of the Company shall
increase to RMB7,850,964, increased by RMB1,440,964.
	 
	2.3	 	The portion of the increased registered capital shall be subscribed for by the Investor with
the premium in an equivalent amount of U.S. dollars. The Capital Increase Amount payable by
the Investor is RMB15,000,000 (for the purpose of this Agreement, in respect of the Capital
Increase Amount to be paid by the Investor in accordance with Article 5 of the Agreement, the
exchange rate of U.S. dollar against RMB shall the middle basic exchange rate announced by the
People’s Bank of China on the date of the Investor’s payment), of which, the portion other
than the subscription for the increased registered capital (RMB13,559,036) shall be accounted
into the capital reserve of the Joint Venture, and after the duly establishment of the Joint
Venture, the capital reserve of the Joint Venture shall be transferred to increase the
registered capital according to the shareholding percentage of each shareholder respectively
if such transfer occurs.
	 
	2.4	 	The Parties hereby agree that the Capital Increase Amount shall only be applied for further
development of the Mosquito-Control Light Box Project, business expansion and any other
purpose approved by the Investor. Without the prior written consent of the Investor, the
Capital Increase Amount shall not be applied for the merger with, acquisition of or investment
in any other enterprise.
	 
	2.5	 	Upon completion of the Capital Increase, the shareholding of the Joint Venture shall be as
follows:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage in the
	 	 	Amount of Capital	 	Registered Capital
	Name of Shareholders	 	Contributed (RMB)	 	(%)
	Pacific Asia Mode Cube Limited
	 	 	1,440,964	 	 	 	18.354	%
	Redgate Media AD Co., Ltd.
	 	 	3,269,615	 	 	 	41.646	%
	Weidong Zhu
	 	 	1,962,741	 	 	 	25.000	%
	Shanghai Aoxue Advertising
Broadcasting Co., Ltd.
	 	 	1,177,644	 	 	 	15.000	%
	 
	 	 	 	 	 	 	 	 
	Total
	 	 	7,850,964	 	 	 	100.000	%
	 
	 	 	 	 	 	 	 	 

	3.	 	Conditions Precedent

4

 

	3.1	 	The Capital Increase shall be subject to the fulfillment of the following conditions or a
written waiver of the following conditions by the Investor (hereinafter referred to as
“Conditions Precedent”):

	 	3.1.1	 	The Investor has taken necessary corporate actions, namely:

	 	(i)	 	Approval of the execution and performance of this Agreement,
the Joint Venture Contract and the Restated Articles of Association; and
	 
	 	(ii)	 	Approval of the Capital Increase in accordance with this
Agreement.

	 	3.1.2	 	The shareholders’ meeting of the Company has adopted all necessary
resolutions to:

	 	(i)	 	Approve the execution and performance of this Agreement, the
Joint Venture Contract and the Restated Articles of Association; and
	 
	 	(ii)	 	Approve the Capital Increase in accordance with this
Agreement; and
	 
	 	(iii)	 	All the Existing Shareholders of the Company have waived
their preemptive right in the Capital Increase.

	 	3.1.3	 	All relevant documents have been duly executed and all Government
Approvals have been duly obtained, including:

	 	(i)	 	This Agreement, the Joint Venture Contract and the Restated
Articles of Association have been properly and duly executed and approved by
the relevant government authorities;
	 
	 	(ii)	 	The Company has duly obtained the Approval Certificate for
Foreign-Invested Enterprises and the business license of the Joint Venture,
and such certificate and business license do not require to substantially
amend the Joint Venture Contract or the Restated Articles of Association, or
any such amendments have been approved by the Parties in written form; and
	 
	 	(iii)	 	The Joint Venture has obtained the Certificate of Foreign
Exchange Registration and any other necessary approval from the relevant
government authorities, and such approvals do not require to not substantially
amend the content of relevant applications, or any such amendments have been
approved by the Parties in written form;

	 	3.1.4	 	The Company and the Existing Shareholder have fulfilled their obligations
and duties under this Agreement respectively prior to the Completion Date;
	 
	 	3.1.5	 	All Conditions Precedent for Equity Transfer as prescribed in the Transfer
Agreements have been fully fulfilled and all Equity Transfers have been fully
completed, and there is no violation of the Transfer Agreements by the Existing
Shareholder; and
	 
	 	3.1.6	 	Up to the date of the Completion Date, there is no event which has or by
reasonable prediction will have any material adverse effect on the business operation,
financial condition or assets of the Company.

	3.2	 	The Company and all Existing Shareholders hereby undertake that they shall make all
reasonable efforts to ensure the fulfillment of the Conditions Precedent prescribed in Article
3.1 (other than Article 3.1.1) as soon as possible, provided that in all events such
Conditions Precedent shall be fulfilled within three (3) months upon the execution of this
Agreement. The Investor hereby undertakes that it shall make all reasonable efforts to ensure
the fulfillment of the Conditions Precedent prescribed in Article 3.1.1 as soon as possible,
provided that in all events such Conditions Precedent shall be fulfilled within three (3)
months upon the execution of this Agreement.

5

 

	3.3	 	With a written notice to the Company and the Existing Shareholders, the Investor may, at its
discretion, waive all or part of the Conditions Precedent as prescribed in Article 3.1 above
(other than Article 3.1.1).
	 
	3.4	 	With respect to the Conditions Precedent prescribed in Article 3.1.1 above, unless such
Conditions Precedent are waived by the Investor, if those Conditions Precedent are not fully
fulfilled within three (3) months upon the execution of this Agreement, the Investor may
immediately terminate this Agreement after sending a written notice to the Company and shall
not take any liability for such termination. However, if the non-fulfillment of such
Conditions Precedent is due to the violation of Article 3.2 by the Company or any of the
Existing Shareholders, such termination shall not have any impact on the Party to take
liabilities for breach of contract.
	 
	3.5	 	Notwithstanding the provisions above, if any Government Approval as described in Article
3.1.3 above requires to substantially amend this Agreement, the Joint Venture or the Restated
Articles of Association, the Parties shall make either of the following decisions through
mutual negotiation:

	 	3.5.1	 	To accept any such substantial amendments and waive the corresponding
Conditions Precedent prescribed in Article 3.1.3 above; or
	 
	 	3.5.2	 	To apply to the relevant government authority to procure the relevant
government authority to amend and reissue such Government Approval in the form
acceptable to the Parties.

	 	 	In addition, if any Government Approval (for the purpose of this Article 3.5, it shall not
include the business license, foreign exchange registration certificate and any other
certificate or license issued on the basis of the business license) requires to
substantially amend this Agreement, the Joint Venture Contract or the Restated Articles of
Association, and the Parties do not unanimously accept any such substantial amendments or
waive the corresponding Conditions Precedent, then the Parties shall not file an application
to the Administration for Industry and Commerce for the issuance of the business license
until such substantial amendment and the relevant issues are settled in the form acceptable
to the Parties.
	 
	4.	 	Undertakings
	 
	4.1	 	As of the date of this Agreement and prior to the Completion Date, unless otherwise approved
by the Investor in written form or otherwise stipulated herein, the Company and the Existing
Shareholders shall ensure that:

	 	4.1.1	 	The Company shall take all reasonable actions to maintain and protect all its
assets;
	 
	 	4.1.2	 	The Existing Shareholders shall not transfer or mortgage any of their shares
of the Company to any third party or create whatever form of Encumbrances thereon;
	 
	 	4.1.3	 	They shall promptly disclose to the Investor any fact or event (no matter they
already exist on or prior to the date of this Agreement or occur later on) which is
known by the Company or the Existing Shareholders and may possibly cause the Existing
Shareholders or the Company to violate any representation or warranty made by them
herein according to the facts and circumstances on the Completion Date;
	 
	 	4.1.4	 	The Company shall not declare any dividend or make any dividend payment or any
other distribution;
	 
	 	4.1.5	 	The Company shall not issue or permit to issue any share or bond or take any
action subject to the consent of the shareholders’ meeting or the board of directors as
required by the laws or the Articles of Association;

6

 

	 	4.1.6	 	The Company and the Existing Shareholders shall not take any action to prevent
or unduly delay the completion of the transaction contemplated herein;
	 
	 	4.1.7	 	If the Company pays or decides to pay to any employee any bonus or benefits
beyond the current normal employee remuneration and benefit plan, such action or
decision shall be subject to the prior written consent of the Investor;
	 
	 	4.1.8	 	The Company shall not change or terminate or permit to change or terminate any
existing contract to which it is a party and of which the change or termination will
have material effect on its business scope or business nature, unless such change or
termination is required by any effective court ruling or arbitration award;
	 
	 	4.1.9	 	All investment activities (other than the normal business activities of the
Company) during the period from the date of this Agreement to the Completion Date shall
be subject to the prior written consent of the Investor;
	 
	 	4.1.10	 	The Company shall not enter into any other agreement, contract, arrangement or
transaction, other than those entered into during the course of normal business
operation; and
	 
	 	4.1.11	 	The Company shall go through all necessary formalities of the government examination,
approval and registration according to the applicable requirements (if any) of the
relevant government authority concerning the Mosquito-Control Light Box Project.

	4.2	 	If the Company or any Existing Shareholder substantially or materially violates any
undertakings made by it in Article 4.1 above prior to the Completion Date, the Investor shall
have the right to unconditionally terminate this Agreement without taking any liability. In
addition, the Company or the Existing Shareholders shall indemnify the Investor against all
losses and damages resulting from such violation.
	 
	4.3	 	The Company shall go through all formalities relating to the Government Approval and the
Existing Shareholders and the Investor shall provide necessary assistance.
	 
	5.	 	Completion of Capital Increase
	 
	5.1	 	The Investor hereby agrees that as required for the issuance of the business license,
completion of capital verification and other formalities relating to the Joint Venture, after
the Company obtains the Approval Certificate for Foreign Invested Enterprises, it shall, as
soon as possible, complete the formalities of approval from and registration with the
competent foreign exchange administration authority and open a foreign exchange account for
the Company. Within ten (10) Business Days after all the aforesaid formalities are completed,
the Investor shall pay 20% of the increased portion of the registered capital (i.e. an amount
of U.S. dollars equivalent to RMB288,192.80) to the account to be opened by the Company, and
the Company shall go through all necessary formalities, such as approval from and registration
with the competent foreign exchange administration authority, capital verification and
reissuance of business license of the Company.
	 
	5.2	 	Within three (3) Business Days after all Conditions Precedent as prescribed in Article 3.1
above (other than Article 3.1.1) are fulfilled (or waived), the Company and the Existing
Shareholders shall provide the relevant evidences and documents to the Investor and send a
written notice to the Investor.
	 
	5.3	 	Within three (3) Business Days after the Conditions Precedent as prescribed in Article 3.1.1
above are fulfilled, the Investor shall send a written notice to the Company and the Existing
Shareholders, stating that the Conditions Precedent in Article 3.1.1 have been fulfilled.
	 
	5.4	 	The Parties shall jointly make a written confirmation on whether the Conditions Precedent
have been fulfilled within three (3) Business Days after the date of sending a notice as
mentioned in Article 5.2 or Article 5.3 (whichever is later), or on any other date agreed upon
by the Parties.

7

 

	5.5	 	The Parties hereby agree that within seven (7) Business Days from the date of the Agreement,
the Investor shall remit an amount of U.S. dollars equivalent to RMB4,711,807.20 to the bank
account designated by the Company.
	 
	5.6	 	The Parties hereby agree that the Investor shall pay 1/3 of Capital Increase Amount within
one (1) month from the Completion Date of Capital Increase, i.e. the Investor shall remit an
amount of U.S. dollars equivalent to RMB5,000,000 to the bank account designated by the
Company.
	 
	5.7	 	The Parties hereby agree that the Investor shall pay 1/6 of Capital Increase Amount within
two (2) months from the Completion Date of Capital Increase, i.e. the Investor shall remit an
amount of U.S. dollars equivalent to RMB2,500,000 to the bank account designated by the
Company.
	 
	5.8	 	The Parties hereby agree that the Investor shall pay 1/6 of Capital Increase Amount within
three (3) months from the Completion Date, i.e. the Investor shall remit an amount of U.S.
dollars equivalent to RMB2,500,000 to the bank account designated by the Company.
	 
	5.9	 	Notwithstanding the provisions above, the Parties further agree that if any provision of
Article 5 hereof is inconsistent with any applicable laws or regulations or the requirements
of any government authority (such as the Approval Certificate for Foreign Invested
Enterprises), the Parties shall amend Article 5 through amicable negotiation so that the
Capital Increase hereunder may be completed in accordance with the laws and in conformity to
the commercial intention of the Parties.
	 
	6.	 	Equity Transfer and Pledge
	 
	 	 	Within 36 months upon Completion of the Capital Increase, the Original Shareholders shall
not transfer, distribute, pledge or otherwise dispose of any share owned by them.
	 
	7.	 	Representations and Warranties
	 
	7.1	 	The Company and the Original Shareholders hereby acknowledge that the Investor signs this
Agreement in reliance upon the representations and warranties made by the Original
Shareholders in the Transfer Agreement B and the undertakings made in Article 4 hereof. Each
undertaking, representation and warranty shall be deemed as separate and independent, and
shall not be restricted or bound by reference to or application of any other representation or
warranty made herein or any other provision hereof, unless otherwise expressly stipulated
herein.
	 
	7.2	 	The Company and the Original Shareholders hereby agree that if any of them violates any
undertaking made herein or any representation or warranty referred to herein, it shall
indemnify the Investor against and hold the Investor harmless from any direct or indirect
losses, damages, costs, expenses, liabilities or claims (including any losses, damages,
reasonable costs and expenses, liabilities or claims incurred from defense or settlement of
any claim regarding such liabilities), including (but not limited to) any losses arising from
its ownership of equity interest in the Company. Furthermore, if the Original Shareholders
breach any undertaking made herein or any representation or warranty referred to herein, which
causes depreciation of the Joint Venture or reduction of the assets of the Joint Venture
(including but not limited to suffering any losses, damages, administrative penalty, paying
additional Taxes or undertaking any other legal liability by the Joint Venture), the Original
Shareholders shall take all actions to hold the Joint Venture harmless from such losses and
damages and indemnify the Joint Venture against such depreciation or reduction of assets of
the Joint Venture as required by the Investor.
	 
	8.	 	Provision of Information Materials
	 
	 	 	From the date of this Agreement to the Completion Date of Capital Increase, the Existing
Shareholders shall procure the Company to grant the Investor and its authorized
representatives access to the premises or office of the Company, and examine all books,
title deeds, records, accounts and other documents of the Company reasonably requested by
the Investor, and shall permit the Investor to copy any of such books, title deeds, records,
accounts

8

 

	 	 	and other documents, and shall procure the Company to notify its directors and employees to
provide all information materials and explanations reasonably requested by the aforesaid
representatives.

	9.	 	Confidentiality
	 
	9.1	 	Without the prior written consent of the Parties, no Party shall release to the public the
Agreement, any other document or any subsequent document signed relating to this Agreement or
the investment contemplated herein.
	 
	9.2	 	Unless otherwise stipulated in Article 9.3 hereof, the Parties shall treat the following
information which are received or acquired as a result of execution of this Agreement (or any
other agreement executed under this Agreement) as confidential and shall not disclose or use:

	 	(1)	 	The terms and conditions of this Agreement, and terms and conditions of any
other agreement executed under this Agreement;
	 
	 	(2)	 	The negotiation relating to this Agreement (and such other agreement); or
	 
	 	(3)	 	The business, financial matter and other affair (including future plan and
target) of any other Party.

	9.3	 	Under any of the following circumstances, Article 9.1 and Article 9.2 above shall not be
applied to prevent the disclosure or use of any information:

	 	(1)	 	Disclosure or use of any information as required by the laws, or any regulatory
authority or the rules or regulations of any recognized stock exchange;
	 
	 	(2)	 	Disclosure or use of any information as required when granting all interests of
this Agreement to a Party;
	 
	 	(3)	 	Disclosure or use of any information required for the purpose of any judicial
proceedings arising from this Agreement or any other agreement executed under or
relating to this Agreement, or disclosure of any Tax related information of the
disclosing party to the Taxation authority as reasonably required;
	 
	 	(4)	 	Disclosure of any information to any professional advisor of any Party,
provided that such professional advisor shall comply with the confidentiality
obligation regarding such information under Article 9.2 above, as if such professional
advisor was a Party to this Agreement;
	 
	 	(5)	 	Any information has been or becomes publicly known other than due to violation
of this Agreement;
	 
	 	(6)	 	Any information disclosed or used with the prior written approval of any other
Party; or
	 
	 	(7)	 	Any information independently developed by a Party after Completion of Capital
Increase.

	10.	 	Assignment
	 
	 	 	Without the prior written consent of the other Parties, no Party shall assign any of its
right, interest or obligation hereunder. However, the Investor may assign its rights,
interests and obligations hereunder to its related parties, or in case of Equity Transfer,
assign its rights, interests and obligations hereunder to the equity assignee. The Joint
Venture and the Existing Shareholders shall assist the Investor in assigning its rights,
interests and obligations hereunder, and shall take and execute, and procure their
respectively directors to take and execute all necessary actions and documents as reasonably
requested by the Investor.

9

 

	 	 	From the date of this Agreement to the Completion Date of Capital Increase, the Company
shall not negotiate or sign any binding document with any third party regarding the Joint
Venture, cooperation or similar matter relating to the equity investment of the Company.
	 
	11.	 	Liabilities for Breach of Contract
	 
	 	 	In case of any breach of this Agreement, the breaching party shall indemnify the
non-breaching party against all losses and damages resulting from such breach (if this
Agreement is terminated or rescinded, such losses and damages shall include the costs and
expenses incurred by the non-breaching party as described in Article 16).
	 
	12.	 	Effectiveness, Amendment and Termination
	 
	12.1	 	This Agreement shall become effective as of the date of execution; if it is subject to the
approval of the examining and approving authority, it shall become effective as of the date of
such approval.
	 
	12.2	 	No amendment or supplementation hereto may become effective unless the same is duly signed by
the Parties in written form. If such amendment or supplementation is subject to the approval
of the examining and approving authority, it shall become effective upon receipt of such
approval. The Parties hereby agree that they shall obtain all approvals from and registrations
with the relevant government authorities of China (including but not limited to the examining
and approving authorities and the Administration for Industry and Commerce) to perfect the
transaction contemplated herein, and shall amend the relevant provision of this Agreement as
required by the relevant government authority (and amend the provision of the Joint Venture
Contract and the Restated Articles of Association accordingly), provided that such amendment
shall not change the intent of the Parties in this Agreement.
	 
	12.3	 	Under any of the following circumstances, the Investor may terminate this Agreement:

	 	12.3.1	 	The Investor or any Existing Shareholder breaches this Agreement, which materially
affects the interests of the Investor reasonably anticipated by the Investor when
executing this Agreement; or
	 
	 	12.3.2	 	Any Transfer Agreement is terminated or rescinded.

	13.	 	Force Majeure
	 
	13.1	 	“Force Majeure” shall refer to any event occurring after the execution of this Agreement,
which is unforeseeable when this Agreement is executed and the occurrence and consequence of
which is inevitable or uncontrollable, or which prevents any Party from performing this
Agreement fully or partially, or which obstructs the performance of this Agreement, including
but not limited to fire, flood, earthquake, typhoon, Tsunami, war, terrorist activity or any
other violent act, accident, strike, epidemic and quarantine control.
	 
	13.2	 	If any Party hereto fails to perform all or part of its obligations hereunder due to a Force
Majeure event, such non-performance shall not be deemed as breach of contract until the
elimination of the effect of such event. The Party claiming for release of its liability due
to the Force Majeure event shall immediately (but no later than fifteen (15) days) upon
occurrence of the event send a written notice to the other Parties by means of telegraph or
fax, stating the nature, date of occurrence and predicted period of such event, as well as the
extent to which the Party is prevented from performing its obligations hereunder, and the
claiming Party shall also provide a valid certificate of such event issued by the local
notarization office (or any other appropriate authority) of the place where such event occurs.
	 
	13.3	 	The Party affected by the Force Majeure event shall make its best efforts to mitigate the
losses caused by the event and it shall not be released from its liabilities for any losses
which would be avoided if appropriate actions had been taken.

10

 

	14.	 	Governing Law and Dispute Settlement
	 
	14.1	 	Governing Law
	 
	 	 	The formation, validity, interpretation, performance, amendment, termination and dispute
settlement of or relating to this Agreement shall be governed by and interpreted according
to the laws of China.
	 
	14.2	 	Arbitration

	 	14.2.1	 	Any dispute arising from or relating to this Agreement shall be first settled by the
Parties through amiable negotiation. If such dispute (including any dispute regarding
the validity or existence of this Agreement) can not be settled through negotiation
within sixty (60) days after any Party sends a notice to the other Parties, such
dispute shall be submitted to China International Economic and Trade Arbitration
Commission Shanghai Sub-commission for arbitration in accordance with the effective
arbitration rules of the said Commission.
	 
	 	14.2.2	 	The arbitration award shall be final and binding upon the Parties and can be
enforceable according to the relevant provisions.
	 
	 	14.2.3	 	The arbitration award may be enforced through the filing of the award with the
competent court or through the assistance of such court in enforcement of the award, as
the case may be. The costs of arbitration shall be borne by the losing party or as
decided by the arbitration tribunal. If any Party has to initiate any legal action to
enforce the arbitration award, the breaching party shall bear any and all reasonable
costs, expenses and reasonable attorney’s fees, including but not limited to extra
costs and expenses incurred from the legal action or enforcement of the arbitration
award.
	 
	 	14.2.4	 	During the course of dispute settlement, the Parties shall continue to perform this
Agreement other than those disputed terms and conditions.

	15.	 	Notice
	 
	15.1	 	All notices shall be written in Chinese and sent to the following address or fax number (as
the case may be) by means of hand delivery, registered mail or fax:
	 
	 	 	Pacific Asia Mode Cube Limited
	 
	 	 	Address: 8/F, Tower B, International Plaza, No. 19, Jianguomenwai Avenue, Beijing
	 	 	Attention: Ying Zhu
	 	 	Tel: 010-58692980
	 	 	Fax: 010-58692960
	 
	 	 	Shanghai Hongmen Advertising Co., Ltd.
	 
	 	 	Address: 2/F, 1A Tower, No. 345 Lane, Xinhua Road, Shanghai
	 	 	Attention: Yun Yang
	 	 	Tel: 021-62810161
	 	 	Fax: 021-52540919

11

 

	 	 	Redgate Media AD Co., Ltd.
	 
	 	 	Address: 8/F, Tower B, International Plaza, No. 19, Jianguomenwai Avenue, Beijing
	 	 	Attention: Ying Zhu
	 	 	Tel: 010-58692980
	 	 	Fax: 010-58692960
	 
	 	 	Weidong Zhu
	 
	 	 	Address: 2/F, 1A Tower, No. 345 Lane, Xinhua Road, Shanghai
	 	 	Tel: 13901729948
	 	 	Fax: 021-52540919
	 
	 	 	Shanghai Aoxue Advertising Broadcasting Co., Ltd.
	 
	 	 	Address: Flat 303, Entrance 4, Building 7, Block 2, Shuanghuayuan Nanli, Chaoyang District,
Beijing
	 	 	Attention: Chengye Guo
	 	 	Tel: 13901201748
	 	 	Fax: 010-87721723

	15.2	 	With respect to any notice, letter or communication issued or sent under Article 15:

	 	15.2.1	 	If a notice is delivered by hand and the return receipt is received, and such notice
is delivered no later than 17:00 on a Business Day of the destination, it shall be
deemed as served on the date indicated on the return receipt; or if such notice is
delivered later than 17:00 on a Business Day or on a Non-business Day of the
destination, it shall be deemed as served at 09:00 on the next Business Day of the
destination; or
	 
	 	15.2.2	 	If a notice is sent by prepaid domestic EMS mail in China, it shall be deemed as
served five (5) Business Days from the posting date; or
	 
	 	15.2.3	 	If a notice is sent by prepaid international courier service from or to any place
outside China, it shall be deemed as served ten (10) Business Days from the posting
date; or
	 
	 	15.2.4	 	If a notice is sent by fax, it shall be deemed as served immediately after
transmission with the sufficient evidence of a transmission report confirming the
successful transmission or of an oral confirmation (which shall be recorded and signed
by the sending party in written form); provided that, however, where a notice sent by
fax is sent later than 17:00 on a Business Day or at any time on a Non-business Day of
the destination, it shall be deemed as served at 09:00 on the next Business Day of the
destination.

12

 

	15.3	 	During the term of this Agreement, any Party may change its notice receiving address or fax
number after sending a written notice to the other Parties at any time.
	 
	16.	 	Expenses
	 
	 	 	The expenses incurred from negotiation, preparation and performance of this Agreement shall
be borne by each Party respectively.
	 
	17.	 	Entire Agreement
	 
	17.1	 	This Agreement and all agreements and/or documents referred to or expressly indicated herein
shall constitute an entire agreement among the Parties with respect to the subject matter
hereof, and supersede all previous oral and written agreements, contracts, understandings and
communications among the Parties with respect to the same subject matter.
	 
	17.2	 	If it is necessary to execute any other agreement for obtaining the Government Approval
required by the Capital Increase hereunder or for going through the formalities of the Change,
the content of such agreement shall be consistent with this Agreement and in case of any
inconsistence, the content of this Agreement shall prevail.
	 
	18.	 	Severability
	 
	 	 	If any provision of this Agreement is held invalid or unenforceable, such provision (to the
extent of its invalidity or unenforceability) shall not be enforced and shall be deemed as
severable from this Agreement, but the validity and enforceability of the remaining
provisions of this Agreement shall not be affected. The Parties shall make all reasonable
efforts to replace such invalid or unenforceable provision with a valid and enforceable
provision, and the effect of such replacing provision shall be same as the originally
intended effect of the invalid or unenforceable provision as far as possible.
	 
	19.	 	Waiver
	 
	19.1	 	If any Party fails or delays to exercise any right or remedy hereunder or under any law
arising from this Agreement, such right or remedy shall not be prejudiced, and it shall not
constitute or be deemed as a waiver or change of such right or remedy, and shall not preclude
the exercise of such right or remedy at any time thereafter. Single or partial exercise of any
right or remedy shall not preclude any other or further exercise of such right or remedy, or
exercise of any other right or remedy.
	 
	19.2	 	Each Party may exercise its rights and remedies hereunder or arising from this Agreement at
any time it considers appropriate.

This Agreement is written in Chinese and executed in China by the duly authorized representatives
of the Parties. This Agreement is made and executed in seven (7) counterparts, one (1) for each
Party hereto and the remaining to be used for going through the relevant formalities for Government
Approval.

13

 

Execution Page

IN WITNESS WHEREOF, the Parties duly executed this Agreement on the date first above written.

	 	 	 	 	 
	Pacific Asia Mode Cube Limited [company seal]

 	 
	Signature:  	/s/ Peter Bush Brack
 	 
	 	Name:  	BRACK, Peter Bush 	 
	 	Title:  	CEO 	 
	 

	 	 	 	 	 
	Shanghai Hongmen Advertising Co., Ltd. [company seal]

 	 
	Signature:  	/s/ Yue Jin
 	 
	 	Name:  	Yue Jin 	 
	 	Title:  	Chairman of the Board 	 
	 
	Redgate Media AD Co., Ltd. [company seal]

 	 
	Signature:  	/s/ Yue Jin
 	 
	 	Name:  	Yue Jin 	 
	 	Title:  	Chairman of the Board 	 
	 
	Weidong Zhu [company seal]

 	 
	Signature:  	/s/ Weidong Zhu
 	 
	 	 	 
	 	 	 	 

 

	 	 	 	 	 

	 	 	 	 	 
	Shanghai Aoxue Advertising Broadcasting Co., Ltd. [company seal]

 	 
	Signature:  	/s/ Chengye Cuo
 	 
	 	Name:  	Chengye Guo 	 
	 	Title:  	Chairman of the Board 	 

 

	 	 	 	 	 

Appendix I

Basic Information of the Company

	 	 	 
	Company Name:

	 	Shanghai Hongmen Advertising Co., Ltd.
	 
	 	 
	Business License No.:

	 	3102292067756
	 
	 	 
	Registered Address:

	 	P-1 Building, No. 7523 Beiqing Highway, Chonggu Town, Qingpu District
	 
	 	 
	Legal Representative:

	 	Yue Jin
	 
	 	 
	Company Type:

	 	Limited Liability Company (Domestic Joint Venture)
	 
	 	 
	Business Scope:

	 	Design, production, publication and agency of advertisements; production of images and documents;
planning of corporate images (a license for special business shall be obtained if it is required by law
or regulation).
	 
	 	 
	Registered Capital:

	 	RMB six million four hundred and ten thousand (RMB6,410,000)
	 
	 	 
	Date of Incorporation:

	 	June 9, 2004
	 
	 	 
	Term of Operation:

	 	From June 9, 2004 to June 8, 2014
	 
	 	 
	Shareholders:

	 	Redgate (51.01%); Weidong Zhu (30.62%); Shanghai Aoxue Advertising Co., Ltd. (18.37%)

APPENDIX I

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