Registration Statement of a Foreign Private Issuer — Form F-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: F-1 Xinhua Finance Media Limited HTML 2.84M
2: EX-3.1 EX-3.1 Amended and Restated Memorandum & Articles 76 305K
of Association
3: EX-3.2 EX-3.2 Amended and Restated Memorandum & Articles 55 225K
of Association
4: EX-4.2 EX-4.2 Specimen Share Certificate 1 17K
5: EX-4.3 EX-4.3 Form of Deposit Agreement 56 237K
6: EX-4.4 EX-4.4 Irrevocable Proxy 5 31K
7: EX-4.5 EX-4.5 Share Purchase Agreement 155 553K
8: EX-4.6 EX-4.6 Investor Rights Agreement 44 190K
9: EX-5.1 EX-5.1 Opinion of Conyers, Dill & Pearman 2 24K
10: EX-8.1 EX-8.1 Opinion of Conyers, Dill & Pearman 2 23K
11: EX-8.2 EX-8.2 Form of Opinion of Latham & Watkins LLP 2 23K
12: EX-10.1 EX-10.1 Share Option Plan 24 103K
21: EX-10.10 EX-10.10 Security Agreement 41 123K
22: EX-10.11 EX-10.11 Advisory Agreement 5 38K
23: EX-10.12 EX-10.12 Consulting Agreement 8 34K
24: EX-10.13 EX-10.13 Strategic Partnership Agreement 52 146K
25: EX-10.14 EX-10.14 Call Option Agreement 21 74K
26: EX-10.15 EX-10.15 Advertising Services Agreement 11 43K
27: EX-10.16 EX-10.16 Cooperation Agreement 11 45K
28: EX-10.17 EX-10.17 Cooperation Agreement 21 76K
29: EX-10.18 EX-10.18 Cooperation Agreement 7 35K
30: EX-10.19 EX-10.19 Call Option Agreement 8 37K
13: EX-10.2 EX-10.2 Indemnification Agreement 10 59K
31: EX-10.20 EX-10.20 Advertising Agreement 20 59K
32: EX-10.21 EX-10.21 Money Journal Cooperation Agreement 7 33K
33: EX-10.22 EX-10.22 Cooperation Agreement 3 26K
34: EX-10.23 EX-10.23 Information Consulting Committee 9 33K
Organization Agreement
35: EX-10.24 EX-10.24 Business Cooperation Agreement 42 144K
36: EX-10.25 EX-10.25 Cooperation Agreement 49 156K
37: EX-10.26 EX-10.26 Equity Pledge Agreement 11 40K
38: EX-10.27 EX-10.27 Equity Purchase Option Agreement 15 46K
39: EX-10.28 EX-10.28 Subrogation Agreement 6 31K
40: EX-10.29 EX-10.29 Service Agreement 8 39K
14: EX-10.3 EX-10.3 Executive Service Agreement 17 71K
41: EX-10.30 EX-10.30 Equity Transfer Agreement 9 36K
42: EX-10.31 EX-10.31 Deed of Non-Competition Undertaking and 6 28K
Release
43: EX-10.32 EX-10.32 Share Subscription Agreement 13 69K
44: EX-10.33 EX-10.33 Equity Transfer and Capital Increase 10 40K
Agreement
45: EX-10.34 EX-10.34 Sale and Purchase of Equity Interest 57 189K
46: EX-10.35 EX-10.35 Equity Transfer Agreement 10 37K
47: EX-10.36 EX-10.36 Loan and Share Purchase Agreeement 65 199K
48: EX-10.37 EX-10.37 Subscription Agreement 50 170K
49: EX-10.38 EX-10.38 Share Purchase Agreement 15 57K
50: EX-10.39 EX-10.39 Share Purchase Agreement 82 295K
15: EX-10.4 EX-10.4 Trademark License Agreement 9 38K
51: EX-10.40 EX-10.40 Agreement for the Sale and Purchase of 41 158K
Equity Interest
52: EX-10.41 EX-10.41 Share Subscription Agreement 19 93K
53: EX-10.42 EX-10.42 Agreement for Sale and Purchase of Shares 23 71K
54: EX-10.43 EX-10.43 Share Purchase and Sale Agreement 2 20K
55: EX-10.44 EX-10.44 Share Transfer Agreement 1 18K
56: EX-10.45 EX-10.45 Agreement for Sale and Purchase of Shares 15 61K
57: EX-10.46 EX-10.46 Promissory Note (Sino Investment Holdings 1 18K
Ltd)
58: EX-10.47 EX-10.47 Share Purchase Agreement 16 61K
59: EX-10.48 EX-10.48 Form of Employment Agreement 17 70K
16: EX-10.5 EX-10.5 Business Cooperation Agreement 14 51K
17: EX-10.6 EX-10.6 Stock Option Agreement 6 44K
18: EX-10.7 EX-10.7 Group Services Agreement 13 50K
19: EX-10.8 EX-10.8 Amended and Restated Credit Agreement 168 537K
20: EX-10.9 EX-10.9 Pledge Agreement and Irrevocable Proxy 16 61K
60: EX-21.1 EX-21.1 Subsidiaries of the Registrant 2± 20K
61: EX-23.1 EX-23.1 Consents of Deloitte Touche Tohmatsu 9 28K
62: EX-23.3 EX-23.3 Consent of Latham & Watkins LLP 1 19K
63: EX-23.5 EX-23.5 Form of Consent of American Appraisal 1 18K
China Ltd.
64: EX-99.1 EX-99.1 Code of Business Conduct and Ethics 15 71K
65: EX-99.2 EX-99.2 Strategic Cooperation Agreement 17 64K
66: EX-99.3 EX-99.3 Cooperation Agreement 3 26K
67: EX-99.4 EX-99.4 Content License Agreement 11 39K
68: EX-99.5 EX-99.5 Opinion of Commerce & Finance Law Offices 16 71K
EXHIBIT 10.25
XINHUA FINANCE LIMITED
and
SHANDONG ECONOMIC OBSERVER CO., LTD.
and
SHANDONG SANLIAN GROUP CO., LTD.
and
ECONOMIC OBSERVER PRESS OFFICE
and
BEIJING JINGGUANXINCHENG ADVERTISING CO., LTD.
----------
COOPERATION AGREEMENT
IN RELATION TO ECONOMIC OBSERVER
----------
20 APRIL, 2006
TABLE OF CONTENTS
[Download Table]
ITEM DESCRIPTION PAGE
---- ----------- ----
1 DEFINITIONS 1
2 THE TRANSACTION AND COOPERATION 6
3 CONSIDERATION 7
4 CLOSING CONDITIONS PRECEDENT 8
5 CLOSING 9
6 COVENANTS 9
7 WARRANTIES 12
8 INDEMNITY 13
9 NON-COMPETE COVENANT 14
10 TERMINATION 14
11 MISCELLANEOUS 15
SCHEDULE A CORPORATE DETAILS OF JGXC 19
SCHEDULE B CLOSING CONDITIONS PRECEDENT 20
SCHEDULE C DOCUMENTS DELIVERABLES AT OR PRIOR TO CLOSING 21
SCHEDULE D VENDORS WARRANTIES 22
SCHEDULE E XFL WARRANTIES 31
SCHEDULE F DETAILS OF ECONWORLD 32
SCHEDULE G MANAGEMENT TEAM OF JGXC AND EVENT COMPANY 33
SCHEDULE H MANAGEMENT CONTRACT 34
SCHEDULE I INDEMNIFICATION LETTER 35
SCHEDULE J MATERIAL CONTRACTS 36
SCHEDULE K LEASES 37
SCHEDULE L INTELLECTUAL PROPERTY 38
APPENDIX 1 Equity Transfer Agreement regarding Beijing JGXC
APPENDIX 2 Articles of Association of Beijing JGXC
APPENDIX 3 Business Cooperation Agreement
APPENDIX 4 Business Cooperation Contract
APPENDIX 5 Information Consultation Committee Organization Agreement
APPENDIX 6 Articles of Association of Beijing Jingshi Jingguan
THIS COOPERATION AGREEMENT (this "AGREEMENT") is made on the 20th day of April
2006.
BETWEEN
(1) XINHUA FINANCE LIMITED, a company incorporated under the laws of the Cayman
Islands and listed on the Mothers BOARD of the Tokyo Stock Exchange
(Symbol: 9399) ("XFL");
(2) SHANDONG ECONOMIC OBSERVER CO., LTD., a company incorporated under the laws
of the People's Republic of China (the "PRC") with registration number
3700001806860 and a registered address at No. 22, Leyuan Road, Jinan City
("SEOC");
(3) SHANDONG SANLIAN GROUP CO., LTD., a company incorporated under the laws of
the PRC with registration number 3700001805047-2 and a registered address
at No. 12, Quetuquan Road, Jinan City ("SANLIAN");
(4) ECONOMIC OBSERVER PRESS OFFICE, an unincorporated legal entity established
under the laws of the PRC with registration number 237000010007 and a
registered address at Gao'er People's Government, Licheng District, Jinan
City ("EOPO" ); and
(5) BEIJING JINGGUANXINCHENG ADVERTISING CO., LTD., a company incorporated
under the laws of the PRC with registration number 1101111930073 and a
registered address at 18-C66, Construction Road, Kaixuan Road, Fangshan
District, Beijing ("JGXC").
WHEREAS
A. SANLIAN is holding 76.1% of the equity interest in SEOC while SEOC is the
sole shareholder of JGXC holding 100% of the equity interest in JGXC;
B. SANLIAN is the sponsor and owner of EOPO who has been licensed by the
government to edit, publish and distribute the NEWSPAPER "Economic
Observer", and is the controlling shareholder of SEOC;
C. XFL desires to purchase from SEOC, and SEOC desires to sell to XFL all of
the legal and beneficial interests in and to the EQUITY (as defined below)
representing 50% of registered capital of JGXC on the terms and conditions
set out in this AGREEMENT; and
D. XFL, SANLIAN, SEOC, EOPO and JGXC desire to enter into and complete the
TRANSACTION (as defined below) on the terms and conditions set out in this
AGREEMENT.
NOW, THEREFORE, in consideration of the premises and the mutual covenants set
forth herein, XFL, SANLIAN, SEOC, EOPO and JGXC agree as follows:
1 DEFINITIONS
1.1 Definitions. The following terms, as used herein, have the following
meanings:
"AFFILIATES" of a specified PERSON means any other PERSON that,
directly or indirectly, through one or more intermediaries, CONTROLS,
is CONTROLLED by, or is under common CONTROL with, such specified
PERSON or, in the case of a natural person, such PERSON's spouse,
parents and descendants (whether by blood or adoption and including
stepchildren);
"AGREED FORM" means, in relation to any document, the form of that
document which has been agreed upon by each of the PARTIES hereto
before CLOSING;
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"BOARD" means the board of directors of JGXC;
"BUSINESS DAY" means any Monday, Tuesday, Wednesday, Thursday and
Friday on which banks in Tokyo, Hong Kong or the PRC are not required
or permitted by laws to be closed;
"CLAIMANT" shall have the meaning provided in Clause 11.5(a);
"CLOSING" shall have the meaning provided in Clause 5;
"CLOSING CONDITIONS PRECEDENT" shall have the meaning provided in
Clause 4.1;
"CLOSING DATE" shall have the meaning provided in Clause 5;
"CONSENTS" means any consent, approval, order, or authorization of or
registration, declaration, or filing with or exemption by or from a
Governmental Body;
"CONSIDERATION" shall have the meaning provided in Clause 3.1;
"CONSTITUTIONAL DOCUMENTS" shall have the meaning provided in Clause
(a) of Part C of Schedule D;
"CONTROL", "CONTROLS", "CONTROLLED" (or any correlative term) means
the possession, directly or indirectly, of the power to direct or
cause the direction or the management of a PERSON, whether through the
ownership of voting securities, by contract, credit arrangement or
proxy, as trustee, executor, agent or otherwise. For the purpose of
this definition, a PERSON shall be deemed to CONTROL another PERSON if
such first PERSON, directly or indirectly, owns or holds more than 50%
of the voting equity interests in such other PERSON;
"DIRECTORS" means the members from time to time of the BOARD;
"DISPUTE NOTICE" shall have the meaning provided in Clause 11.4;
"ECONWORLD" means Guangzhou Jing Shi Culture Spread Co., Ltd, a
company established under the laws of the PRC, the details of which
are set out in Schedule F.;
"INFORMATION CONSULTING COMMITTEE" shall have the meaning provided in
Clause 2.1.7;
"ENCUMBRANCES" means and includes any interest or equity of any person
(including, without prejudice to the generality of the foregoing, any
right to acquire, option or right of pre-emption) or any mortgage,
charge, pledge, claims, agreements, equities, lien or assignment and
other third party rights of any nature whatsoever and together with
all rights of any nature whatsoever now or hereafter attaching or
accruing to the property including, where the property is shares or
equity interests in a company, all rights to any dividends or other
distribution declared paid or made in respect of them, or any other
encumbrance, priority or security interest or arrangement of
whatsoever nature over or in the relevant property;
"EQUITY" means a total of 50% interest in the registered capital of
JGXC to be sold by SEOC and purchased by XFL under the relevant
TRANSACTION DOCUMENTS;
"EVENT COMPANY" shall have the meaning provided in Clause 2.1.8;
"EXISTING CONTRACTS" shall have the meaning provided in Clause (i) of
Part C of Schedule D;
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"IFRS" means the International Financial Reporting Standards
promulgated by the International Accounting Standards Board from time
to time;
"INDEMNIFIED PARTY" shall have the meaning provided in Clause 10.4;
"INDEMNIFYING PARTY" shall have the meaning provided in Clause 10.4;
"INITIAL PAYMENT" shall have the meaning provided in Clause 3.1(a);
"INTERIM PAYMENT" shall have the meaning provided in Clause 3.1(e);
"INTELLECTUAL PROPERTY" means, collectively, the OWNED INTELLECTUAL
PROPERTY and the LICENSED INTELLECTUAL PROPERTY;
"LICENSED INTELLECTUAL PROPERTY" means any and all license rights
granted to JGXC, SEOC or EOPO in any third party intellectual property
or other proprietary or personal rights, including any and all of the
following that are licensed to JGXC, SEOC or EOPO anywhere in the
world: trademarks, trade names, service marks and trade dress, and all
goodwill associated with trademarks, trade names, corporate names,
business names, brand names, service marks and trade dress; patents;
concepts; prototypes; drawings; designs; logos; trade dress;
distinguishing guises; certification marks; official marks; mask
works; utility models; domain names and other identifiers for internet
protocol addresses and networks, fictional characters, and other
indicators of source or business identifiers, and all goodwill
associated therewith; copyrights and copyrightable works; databases;
graphics; schematics; marketing, sales and user data and strategies
and customer lists; technology; trade secrets, including confidential
know-how, inventions, invention disclosures, inventor's notes,
improvements, discoveries, formulae, specifications and processes;
computer software programs of any kind (in both source and object code
form); application programming interfaces; protocols; and any renewal,
extension, reissue, continuation or division rights, applications
and/or registrations for any of the foregoing;
"MANAGEMENT" means the key management team of JGXC or EVENT COMPANY as
listed in Schedule G;
"MANAGEMENT CONTRACTS" means the four-year management employment
contracts in the form set out in Schedule H with each member of
MANAGEMENT;
"MARKET VALUE" shall mean, with respect to XFL SHARES, the average of
the closing price of XFL SHARES on the Mothers Board of the Tokyo
Stock Exchange for the fifteen (15) trading days up to and including
the third trading day prior to the applicable SUBSEQUENT PAYMENT DATE
(adjusted to give effect to any stock splits, dividends or other
recapitalizations occurring during such fifteen-day period),
calculated using the closing Dollar/Japanese Yen exchange rate as
reported by Bloomberg for the day immediately preceding the applicable
payment date;
"MATERIAL ADVERSE CHANGE" means any event, circumstance or occurrences
which might reasonably be expected to have a material adverse effect
on the prospects, business, operations or financial condition of EOPO
or JGXC taken as a whole or that would materially affect the ability
of any PERSON (other than XFL) who is a party to any of the
TRANSACTION DOCUMENTS to perform its material obligations under any of
the TRANSACTION DOCUMENTS;
"NEWSPAPER" means the newspaper currently named "Economic Observer",
its successor or substitute, and any other publications primarily
focusing on finance and economic area, in
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whatever form including without limitation paper or electronic
publications, together with any or all of the sections, supplements,
attachments, pamphlet or other derivative thereof, as published or
issued from time to time by EOPO;
"OWNED INTELLECTUAL PROPERTY" means any and all of the following that
are owned (including joint ownership) or held by SEOC, JGXC or EOPO
anywhere in the world: trademarks, trade names, service marks and
trade dress, and all goodwill associated with trademarks, trade names,
corporate names, business names, brand names, service marks and trade
dress; patents; concepts; prototypes; drawings; designs; logos; trade
dress; distinguishing guises; certification marks; official marks;
mask works; utility models; domain names and other identifiers for
internet protocol addresses and networks, fictional characters, and
other indicators of source or business identifiers, and all goodwill
associated therewith; copyrights and copyrightable works; databases;
graphics; schematics; marketing, sales and user data and strategies
and customer lists; technology; trade secrets, including confidential
know-how, inventions, invention disclosures, inventor's notes,
improvements, discoveries, formulae, specifications and processes;
computer software programs of any kind (in both source and object code
form); application programming interfaces; protocols; and any renewal,
extension, reissue, continuation or division rights, applications
and/or registrations for any of the foregoing;
"PARTIES" means XFL, SEOC, SANLIAN, EOPO and JGXC, and "PARTY" means
any of them;
"PERSON" or "PERSONS" means any natural person, corporation, company,
association, partnership, organization, business, firm, joint venture,
trust, unincorporated organization or any other entity or
organization, and shall include any governmental authority;
"PRC" means the People's Republic of China, excluding Hong Kong SAR,
Macao SAR and Taiwan for the purposes of this AGREEMENT;
"PRC LEASE" or "PRC LEASES" shall have the meanings provided in Clause
(q) of Part C of Schedule D;
"XFL NOMINEE" means Beijing Tai De Advertisement Co., Ltd.;
"RESPONDENT" shall have the meaning provided in Clause 11.4;
"RMB" means the lawful currency of PRC;
"SUBSEQUENT PAYMENT DATE" shall have the meaning provided in Clause
3.1 (b);
"SUBSEQUENT PAYMENT" shall have the meaning provided in Clause 3.1
(b);
"SUBSIDIARY" means a corporation, partnership, limited liability
company, or other entity of which such corporation or entity directly
or indirectly owns or controls voting securities or other interests
that are sufficient to elect a majority of the board of directors or
other managers of such corporation, partnership, limited liability
company or other entity;
"TRANSACTION" means the transactions contemplated by the TRANSACTION
DOCUMENTS;
"TRANSACTION DOCUMENTS" means this AGREEMENT and the documents
referred to in Clause 2.1 of this AGREEMENT;
"US$" and "US DOLLARS" means the lawful currency of the United States
of America;
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"VENDORS" means SEOC, SANLIAN and EOPO;
"VENDOR DESIGNATED BANK ACCOUNT" means the bank account designated by
the VENDORS for receiving the CONSIDERATION or any part thereof. For
the avoidance of doubt, a bank account shall be deemed to be
designated by the VENDORS if the designation is given by SANLIAN;
"VENDOR DESIGNATED PERSON" means a PERSON designated by the VENDORS
for receiving and holding XFL SHARES as part of the CONSIDERATION. For
the avoidance of doubt, a PERSON shall be deemed to be designated by
the VENDORS if the designation is given by SANLIAN;
"VENDORS WARRANTIES" means the representations and warranties given by
the VENDORS as set out in Schedule D;
"WARRANTIES" means XFL WARRANTIES and/or VENDORS WARRANTIES, as
appropriate;
"XFL SHARES" means the shares in the capital of XFL;
"XFL WARRANTIES" means the representations and warranties given by XFL
as set out in Schedule E;
"2006 FINANCIALS" means the audited financial statements of JGXC for
the financial period starting from April 1, 2006 and ended March 31,
2007, prepared in accordance with IFRS by an international accounting
firm selected by XFL;
"2006 INTERIM FINANCIALS" means the audited financial statements of
JGXC for the financial period starting from April 1, 2006 and ended
September 30, 2006, prepared in accordance with IFRS by an
international accounting firm selected by XFL;
"2006 NET PROFIT" means JGXC's consolidated profit after taxation
being carried on as a going concern in the ordinary course set out in
the 2006 FINANCIALS prepared in accordance with IFRS in each case
excluding extraordinary items and professional fees paid to the
auditors to prepare the financial statements;
"2006 INTERIM NET PROFIT" means JGXC's consolidated profit or loss
after taxation being carried on as a going concern in the ordinary
course set out in the 2006 INTERIM FINANCIALS prepared in accordance
with IFRS in each case excluding extraordinary items and professional
fees paid to the auditors to prepare the financial statements.
1.2 Interpretation. In this AGREEMENT:
(a) the headings are inserted for convenience only and shall not
affect the construction of this AGREEMENT;
(b) references to statutory provisions shall be construed as
references to those provisions as amended or re-enacted or as
their application is modified by other statutory provisions
(whether before or after the date hereof) from time to time and
shall include any provisions of which they are re-enactments
(whether with or without modification);
(c) all times and dates in this AGREEMENT shall be Hong Kong times
and dates except where otherwise stated;
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(d) unless the context requires otherwise, words incorporating the
singular shall include the plural and vice versa and words
importing one gender shall include every gender; and
(e) references herein to Clauses, Recitals and Schedules are to
clauses and recitals of and schedules to this AGREEMENT.
1.3 Recitals, Schedules. All Recitals and Schedules form part of this
AGREEMENT and shall have the same force and effect as if expressly set
out in the body of this AGREEMENT and any reference to this AGREEMENT
shall include the Recitals and Schedules.
1.4 Joint Obligations. Warranties, covenants, indemnities or other
obligations expressed in this AGREEMENT to be given by more than one
party shall be deemed to be given by such parties on a joint and
several basis unless otherwise expressly provided for.
2 THE TRANSACTION AND COOPERATION
The PARTIES hereby agree to enter into the TRANSACTION on the terms and
conditions hereof. The TRANSACTION consists of the transactions under this
AGREEMENT and the following documents:
2.1 an agreement for sale and purchase of the EQUITY ("SPA") to be entered
into by and between SEOC and XFL NOMINEE in AGREED FORM as set out in
Appendix [1] attached hereto, under which SEOC agrees to sell and XFL
NOMINEE agrees to purchase the EQUITY;
2.2 an amended article of association of JGXC ("AMENDED AOA") in AGREED
FORM as set out in Appendix [2] attached hereto;
2.3 a business cooperation agreement to be entered into by and among EOPO,
JGXC and ECONWORLD in AGREED FORM as set out in Appendix [3], under
which EOPO agrees to grant to the EVENT COMPANY an exclusive right to
organize events in the name of EOPO or the NEWSPAPER and an exclusive
agency in respect of financial advertisements on the NEWSPAPER;
2.4 a business cooperation contract to be entered into by and among
SANLIAN, SEOC, EOPO and JGXC in AGREED FORM as set out in Appendix
[4], under which the PARTIES agree to enter into cooperation in
respect of the intellectual property rights, exclusive advertisement
agency and publishing and printing management in connection with the
NEWSPAPER;
2.5 an organization agreement in respect of the INFORMATION CONSULTING
COMMITTEE ("ICC AGREEMENT") to be entered into by and among XFL,
SANLIAN and EOPO in AGREED FORM as set out in Appendix [5], under
which the parties agree to establish the INFORMATION CONSULTING
COMMITTEE and EOPO agrees to carry on its business under the
instruction and guidance of the INFORMATION CONSULTING COMMITTEE;
2.6 an articles of association of the EVENT COMPANY to be entered into by
and between JGXC and ECONWORLD in AGREED FORM as set out in Appendix
[6], under which JGXC and ECONWORLD agree to jointly establish the
EVENT COMPANY;
2.7 the MANAGEMENT CONTRACTS; and
2.8 other agreements, contracts or documents in relation to the
transactions contemplated by the above documents or this AGREEMENT.
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3 CONSIDERATION
3.1 Subject to the terms and conditions set forth in this AGREEMENT, the
consideration (the "CONSIDERATION") for the whole TRANSACTION shall
comprise of the INITIAL PAYMENT and the SUBSEQUENT PAYMENT, determined
and payable in the manner, at the times and in the amounts set forth
in this Clause 3.1:
(a) an initial payment (the "INITIAL PAYMENT") equivalent to RMB80,
000,000, which shall be payable as follows:
(i) RMB 2,500,000 (the "DOMESTIC PAYMENT") by wire transfer
within ten (10) BUSINESS DAYS of CLOSING to the PRC domestic
bank account designated by SEOC; and
(ii) US dollars equivalent to RMB37,500,000 by wire transfer
within ten(10) BUSINESS DAYS of CLOSING to a VENDOR
DESIGNATED BANK ACCOUNT; and
(iii) delivery of XFL SHARES within twenty (20) BUSINESS DAYS of
CLOSING, or any other time as agreed by the PARTIES, to a
VENDOR DESIGNATED PERSON or PERSONS, rounded to the nearest
whole share, with an aggregate Market Value equal to RMB40,
000,000, subject to subclause (f) below.
(b) Subject to the clause 3.1(c) below, the subsequent payment (the
"SUBSEQUENT PAYMENT") shall be in aggregate an amount equal to
the product of ((A) 2006 NET PROFIT and (B) 17 and (C) 50%) minus
RMB80,000,000 and further minus any INTERIM PAYMENT (if any).
(c) Notwithstanding the aforesaid, in no event the CONSIDERATION
shall be higher than RMB150,000,000 or lower than RMB130,000,000.
For the avoidance of doubt, in the case that the product of ((A)
2006 NET PROFIT and (B) 17 and (C) 50%) is more than
RMB150,000,000, the SUBSEQUENT PAYMENT shall amount to
RMB150,000,000 minus RMB80,000,000 and INTERIM PAYMENT (if any);
in the case that the product of ((A) 2006 NET PROFIT and (B) 17
and (C) 50%) is less than RMB130,000,000, the SUBSEQUENT PAYMENT
shall amount to RMB130,000,000 minus RMB80,000,000 and any
INTERIM PAYMENT (if any);
(d) XFL shall pay to the VENDORS the SUBSEQUENT PAYMENT in US dollars
no later than twenty (20) BUSINESS DAYs after the date of
issuance of the 2006 FINANCIALS (the date on which such payment
is required being the "SUBSEQUENT PAYMENT DATE") in a combination
of (A) money in US dollars in an amount equal to 50% of such sum
to be paid into a VENDOR DESIGNATED BANK ACCOUNT, and (B)
delivery to a VENDOR DESIGNATED PERSON or PERSONS of XFL SHARES,
rounded to the nearest whole share, with an aggregate MARKET
VALUE equal to 50% of such sum, subject to subclause (e) below;
(e) XFL shall pay to a VENDOR DESIGNATED BANK ACCOUNT in US dollars
in amount equivalent to RMB 8,000,000 (the "INTERIM PAYMENT")
provided that the 2006 INTERIM NET PROFIT of JGXC is no less than
RMB7,000,000. SANLIAN shall give XFL a twenty (20) BUSINESS DAYs
prior written notice of its request to the INTERIM PAYMENT
enclosed with the necessary evidence that the said target of 2006
INTERIM NET PROFIT has been achieved. If any INTERIM PAYMENT is
made hereunder, the INTERIM PAYMENT shall be deducted from and
shall reduce the amount of the SUBSEQUENT PAYMENT, and the
proportion of cash to XFL Shares in the SUBSEQUENT PAYMENT shall
be adjusted accordingly to the effect that the
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total CONSIDERATION taken as a whole shall be paid in a
combination of 50% cash and 50% XFL Shares.
(f) Notwithstanding any other provision contained herein,
(i) XFL may, in its sole discretion, deliver to the VENDORS
money in US dollars in lieu of all or a portion of the
portion of the CONSIDERATION otherwise deliverable to the
VENDORS in XFL SHARES;
(ii) if any XFL SHARES payable to the VENDORS as a portion of
CONSIDERATION are not actively traded on the Tokyo Stock
Exchange or a comparable public trading market, then XFL
shall, not less than ten (10) BUSINESS DAYs prior to the
applicable SUBSEQUENT PAYMENT DATE, so notify the VENDORS,
and the VENDORS may, by notice to be delivered to XFL not
less than three (3) BUSINESS DAYs prior to the relevant
payment date, elect to receive money in US dollars in lieu
of such XFL SHARES; and;
(g) Notwithstanding any other provision contained herein, at least
three (3) BUSINESS DAYs in advance of any payment date, the
VENDORS shall, in writing, advise XFL of the manner in which XFL
shall deliver such SUBSEQUENT PAYMENT. Specifically, the VENDORS
shall advise XFL of the persons and necessary account information
where such payments shall be made.
3.2 If any payment is due to XFL or its SUBSIDIARY or XFL NOMINEE under or
in respect of any breach of any TRANSACTION Document (including,
without limitation, any payment pursuant to any indemnity contained in
this AGREEMENT) by a PERSON other than XFL or its SUBSIDIARY or XFL
NOMINEE, the payment shall so far as possible be treated as a
reduction in the CONSIDERATION, which reduction shall be jointly and
severally borne by the persons entitled to receive the CONSIDERATION
or any part thereof.
3.3 Whenever payments or calculations to be made pursuant to this
AGREEMENT require the conversion or comparison of RMB and the
applicable foreign currency, the exchange rate to be applied shall be
the middle rate of exchange of the foreign currency for RMB published
by People's Bank of China ("PBOC") through the authorized China
Foreign Exchange Trading Centre (or if not available from such center,
the other entity authorized by PBOC) on the day which is two (2)
BUSINESS DAYs preceding the actual payment date.
4 CLOSING CONDITIONS PRECEDENT
4.1 The CLOSING is conditional upon the closing conditions precedent set
out in Schedule B ("CLOSING CONDITIONS PRECEDENT") respectively being
fulfilled or waived by XFL under Clause 4.3.
4.2 The PARTIES shall use their reasonable endeavours to co-operate to
enable the CLOSING CONDITIONS PRECEDENT to be fulfilled as soon as
practicable. However, if the CLOSING CONDITIONS PRECEDENT specified in
Schedule B have not been fulfilled within sixty (60) BUSINESS DAYs
after the date of this AGREEMENT as confirmed in writing by XFL, this
AGREEMENT (other than clauses 1, 4, 8, 10, 11.3, 11.4, 11.7 and 11.8)
may be terminated by XFL at its sole and absolute discretion by giving
a written notice to the VENDORS.
4.3 Clause 4.2 above notwithstanding, XFL shall have the right, in its
sole and absolute discretion, to waive the CLOSING CONDITIONS
PRECEDENT specified in Schedule B either in whole or in part or to
require any of such CLOSING CONDITIONS PRECEDENT be fulfilled after
the CLOSING. Where XFL has required that any CLOSING Condition
Precedent be fulfilled after the CLOSING, such CLOSING Condition
Precedent shall automatically become a post-
8
CLOSING undertaking and the SEOC, SANLIAN and EOPO shall fulfil or
cause to fulfil such CLOSING Condition Precedent as soon as
practically possible after the CLOSING but in no event later than
thirty (30) BUSINESS DAYs after the CLOSING.
5 CLOSING
5.1 The TRANSACTION shall be completed (the "CLOSING") on such date (the
"CLOSING DATE") as may be agreed between the VENDORS and XFL following
the fulfilment or waiver of all the CLOSING CONDITIONS PRECEDENT (and,
in any event, within twenty (20) BUSINESS DAYs after such fulfilment
or waiver).
5.2 At or prior to the CLOSING, the Sellers shall deliver (or cause to be
delivered) to XFL each of the documents listed in Schedule C, failing
which XFL shall be under no obligation to confirm that all of the
CLOSING CONDITIONS PRECEDENT have been fulfilled or waived in
accordance with clause 4.1 above.
6 COVENANTS
6.1 Covenants Prior to CLOSING. From the date of this AGREEMENT until the
CLOSING, except for the transactions described in the TRANSACTION
DOCUMENTS or otherwise with the prior written consent of XFL:
(a) The VENDORS warrant and undertake that they will cause each of
JGXC and EOPO to:
(i) conduct its business in the ordinary course and consistent
with past practices;
(ii) maintain in full force and effect its existence;
(iii) promptly and timely prepare and file any reports and tax
returns and pay all taxes and assessments, government fees
and charges, if any, required to maintain its existence and
conduct its business in the ordinary course and consistent
with past practices;
(iv) comply with all applicable laws;
(v) keep records in which true and correct entries will be made
of all transactions entered into;
(vi) duly observe all material requirements of governmental
authorities unless contested in good faith by appropriate
proceedings with the consent of XFL;
(vii) promptly pay and discharge, or cause to be paid and
discharged, when due and payable, all lawful taxes,
assessments and governmental charges or levies imposed upon
its income, profits, property or business of unless
contested in good faith by appropriate proceedings with the
consent of XFL;
(viii) at all times comply with the provisions of all contracts,
agreements and leases to which it is a party, unless
contested in good faith by appropriate proceedings with the
consent of XFL; and
9
(ix) unless otherwise directed by XFL, use best endeavours to
procure that its employees at the date of this AGREEMENT
remain and continue as employees prior to and after the
CLOSING;
(b) The VENDORS warrant and undertake to cause JGXC not to:
(i) modify its Articles of Association;
(ii) cause or permit its liquidation or dissolution;
(iii) institute, or permit to be instituted against it, any
proceeding, which remains undismissed for a period of 15
days after the filing thereof, seeking to adjudicate it as
bankrupt or insolvent, or seeking liquidation, winding-up,
reorganization, arrangement, adjustment, protection, relief
or composition of it under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or
seeking the entry of any order or relief or the appointment
of receiver, trustee or other similar official for them or
for any substantial part of its property;
(iv) make a general assignment for the benefit of its creditors;
(v) declare or pay any dividend or make any distribution to its
shareholders;
(vi) issue, redeem, sell or dispose of, or create any obligation
to issue, redeem, sell or dispose of, any shares of its
capital stock or equity interest;
(vii) effect any stock split, reclassification or combination;
(viii) modify agreements and other obligations with respect to
its long-term indebtedness including, but not limited to its
loan agreements, indentures, mortgages, debentures, notes
and security agreements;
(ix) incur, assume, guarantee or otherwise become obligated or
liable for any indebtedness or encumber any of its assets or
enter into any transaction or contract (other than the
relevant TRANSACTION DOCUMENTS referred to in this
AGREEMENT), or make any commitment relating to its assets or
business;
(x) become a party to any merger or consolidation or any other
business combination with any corporation or other entity,
except as contemplated by this AGREEMENT;
(xi) make any acquisition of all or substantially all of the
stock or assets of any other person or entity;
(xii) take or omit to take any action which could be reasonably
anticipated to have a materially adverse effect upon its
financial condition or assets;
(xiii) grant any Director, officer, legal representative,
employee or consultant any increase in compensation in any
form (other than pursuant to existing employment agreements)
or any severance or termination pay, or enter into or vary
the terms of any employment agreement with such person
except as provided in the MANAGEMENT CONTRACTS;
(xiv) adopt, amend in any material respect or terminate, any
employee benefit program of general applicability;
10
(xv) make any advance or loan to any person or entity; or
(xvi) do anything that shall be approved by the BOARD or
Shareholders' Meeting of JGXC had the TRANSACTION DOCUMENTS
become effective before CLOSING.
6.2 THE VENDORS warrant and undertake that, whether before or after the
CLOSING, except otherwise agreed in writing by XFL:
(a) none of the VENDORS will enter into or permit the existence of
any contract, agreement or arrangement that would be in conflict
with or affect XFL's rights, interest and obligations under any
of the TRANSACTION DOCUMENTS;
(b) the name of the NEWSPAPER will not be changed;
(c) no merger, demerger, alliance, joint venture or other strategic
cooperation will be entered into with any third party in relation
to EOPO or the NEWSPAPER;
(d) EOPO will not transfer, sell, create ENCUMBRANCE on or otherwise
dispose of all or any substantial part of its assets or business;
(e) all licenses and permits necessary for the NEWSPAPER will be
properly maintained in full force and effect;
(f) the appointment or removal of key management positions will not
be effected without prior consent from XFL;
(g) none of the TRANSACTION DOCUMENTS will be amended or terminated
without prior written consent from XFL;
(h) SANLIAN will not transfer, sell, create ENCUMBRANCE on or
otherwise dispose of or reduce its interest or ownership (equity
or otherwise) in or to EOPO or SEOC;
(i) no contract or transaction will be entered into between EOPO as a
party and SANLIAN, SEOC, JGXC or any of their shareholders,
directors, employees or AFFILIATES as the other party;
(j) operation and business of EOPO and publishing of the NEWSPAPER
will not be suspended, stopped or interrupted for any reason
other than Force Majeure; and
(k) Any other matters XFL may reasonably request.
6.3 Further Covenants. THE VENDORS and JGXC hereby irrevocably undertake
to XFL to procure at their own expense the due execution and delivery
of all necessary documents and to do such further acts as may be
necessary to complete the TRANSACTION.
6.4 Access to Information. Until the CLOSING, the VENDORS and JGXC shall
procure that XFL, its agents and representatives are given reasonable
access to such documents relating to the VENDORS or JGXC as XFL shall
request.
6.5 Rescission. XFL and XFL NOMINEE (as the case may be) shall be entitled
to rescind their obligations to complete the TRANSACTION under this
AGREEMENT or the relevant TRANSACTION Documents by notice in writing
to the VENDORS if prior to the CLOSING it appears that any of the
warranties set out in any TRANSACTION Document are not or were
11
not true and accurate in all respects or if any act or event occurs
which, had it occurred on or before the date of that TRANSACTION
Document, would have constituted a breach of any of the warranties or
if there is any material non-fulfilment of any of the warranties which
(being capable of remedy) is not remedied prior to the CLOSING.
6.6 Equity Transfer. SEOC shall not transfer any of the remaining equity
interest in JGXC to any person other than to XFL and or its designated
Affiliate or nominee.
6.7 The PARTIES agree that, when and to the extent permitted by PRC laws,
XFL shall have the right to purchase, by itself or through its
nominee(s), up to 50% of equity interest or similar ownership rights
in EOPO at the price of US$1 or the lowest price permitted by the
applicable laws on terms and conditions as reasonably decided by XFL.
The VENDORS acknowledge that the consideration for such purchase has
been included in the CONSIDERATION paid under this AGREEMENT.
6.8 When the PRC laws so permit, the sponsor or owner of EOPO shall be
changed from SANLIAN to JGXC or an entity jointly established by XFL
or its nominee and SEOC each holding 50% interest (the "NEW SPONSOR").
The relevant licenses, permits and authorizations shall accordingly be
transferred from SANLIAN to the NEW SPONSOR so as to ensure that the
NEWSPAPER and the advertisement business can be fully integrated under
control of the same entity. SANLIAN will not charge any fee or cost
for or impose any conditions on such change and transfer.
7 WARRANTIES
7.1 THE VENDORS jointly and severally represent and warrant to XFL in the
terms of their WARRANTIES as of the date hereof, and acknowledge that
XFL has entered into this AGREEMENT in reliance upon the VENDORS
WARRANTIES. XFL represents and warrants to the VENDORS as of the date
hereof in the terms of XFL WARRANTIES, and acknowledge that the
VENDORS have entered into this AGREEMENT in reliance upon XFL
WARRANTIES.
7.2 Each of the WARRANTIES shall be construed as a separate Warranty and
(save as expressly provided to the contrary) shall not be limited or
restricted by reference to or interference from the terms of any other
Warranty or any other term of this AGREEMENT.
7.3 The WARRANTIES shall be deemed to be repeated immediately before and
on the CLOSING with reference to the facts and circumstances then
existing.
7.4 The rights and remedies of XFL in respect of any breach of this
AGREEMENT shall not be affected by any investigation made by or on
behalf of XFL into the affairs of any PARTY to this AGREEMENT or by
the actual or constructive knowledge on the part of XFL or its agents
or advisors or by any other event or matter whatsoever, except a
specific duly authorized written waiver or release given by XFL and
except as otherwise expressly provided in this AGREEMENT.
7.5 Each PARTY (SEOC, SANLIAN, EOPO and JGXC shall be deemed as one party
for the purpose of this Clause 7.5) undertakes to notify the other
PARTY in writing promptly if it becomes aware of any circumstance
arising after the date of this AGREEMENT which would cause any
Warranty it made to other PARTY (if the WARRANTIES were repeated with
reference to the facts and circumstances then existing) to become
untrue or inaccurate or misleading in any respect.
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8 INDEMNITY
8.1 Indemnity. THE VENDORS, jointly and severally, shall indemnify and
shall keep indemnified and hold harmless XFL from and against:
(a) any and all losses, claims, damage (including lost profits,
consequential damages, interest, penalties, fines and monetary
sanctions), liabilities and costs incurred or suffered by XFL by
reason of, resulting from, in connection with, or arising in any
manner whatsoever out of the breach of any warranty,
representation or covenant or the inaccuracy of any
representation made by any of them or by JGXC contained or
referred to in this AGREEMENT or in any agreement, instrument or
document delivered by or on behalf of SEOC, SANLIAN, EOPO or JGXC
including, but not limited to, any diminution in the value of the
assets of and any payment made or required to be made by XFL or
any SUBSIDIARY or XFL NOMINEE and any costs and expenses incurred
as a result of such breach] provided that the indemnity contained
in this Clause 8 shall be without prejudice to any other rights
and remedies available to XFL; and
(b) the nonfulfillment or breach of any covenant, undertaking,
agreement or other obligation of JGXC, SEOC, SANLIAN, the
MANAGEMENT or any party to any of the TRANSACTION DOCUMENTS
(except the breach by XFL or XFL NOMINEE) under any of
TRANSACTION DOCUMENTS.
8.2 Costs. For the purposes of this Clause 8, "costs" includes lawyers'
(on a solicitor and his own client's basis) and accountants' fees and
expenses, court costs and all other out-of-pocket expenses.
8.3 Survival of Indemnification. The representations and warranties of the
VENDORS and the rights of XFL to indemnification under this AGREEMENT
with respect thereto shall survive CLOSING.
8.4 Indemnification Procedure. A party entitled to indemnification
hereunder (an "INDEMNIFIED PARTY") shall notify promptly the
indemnifying party (the "INDEMNIFYING PARTY") in writing of the
commencement of any action or proceeding with respect to which a claim
for indemnification may be made pursuant to this AGREEMENT; provided,
however, that the failure of any Indemnified PARTY to provide such
notice shall not relieve the Indemnifying PARTY of its obligations
under this AGREEMENT. In case any claim, action or proceeding is
brought against an Indemnified PARTY and the Indemnified PARTY
notifies the Indemnifying PARTY of the commencement thereof, the
Indemnifying PARTY shall be entitled to participate therein and to
assume the defence thereof, to the extent that it chooses, with
counsel reasonably satisfactory to such Indemnified PARTY, and after
notice from the Indemnifying PARTY to such Indemnified PARTY that it
so chooses, the Indemnifying PARTY shall not be liable to such
Indemnified PARTY for any legal or other expenses subsequently
incurred by such Indemnified PARTY in connection with the defence
thereof other than reasonable costs of investigation; provided,
however, that (i) if the Indemnifying PARTY fails to take reasonable
steps necessary to defend diligently the action or proceeding within
twenty (20) calendar days after receiving notice from such Indemnified
PARTY that the Indemnified PARTY believes it has failed to do so; or
(ii) if such Indemnified PARTY who is a defendant in any claim or
proceeding which is also brought against the Indemnifying PARTY
reasonably shall have concluded that there may be one or more legal
defences available to such Indemnified PARTY which are not available
to the Indemnifying PARTY; or (iii) if representation of both parties
by the same counsel is otherwise inappropriate under applicable
standards of professional conduct, then, in any such case, the
Indemnified PARTY shall have the right to assume or continue its own
defence as set forth above (but with no more than one firm of counsel
for all Indemnified
13
PARTIES in each jurisdiction), and the Indemnifying PARTY shall be
liable for any expenses therefor. For the avoidance of doubt, the
expenses referred to in this Clause 9.6 shall be confined to the fees
reasonably payable, as the case may be, to the counsels, lawyers,
experts, auditors, valuers, tribunals, courts or other related parties
for participating in the actions or proceedings.
8.5 Settlement of Claims.
(i) No Indemnifying PARTY shall, without the written consent of the
Indemnified PARTY, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending
or threatened action or claim in respect of which indemnification
may be sought hereunder (whether or not the Indemnified PARTY is
an actual or potential party to such action or claim) unless such
settlement, compromise or judgment (i) includes an unconditional
release of the Indemnified PARTY from all liability arising out
of such action or claim, (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or
on behalf of any Indemnified PARTY and (iii) does not include any
injunctive or other non-monetary relief; and
(ii) XFL may, in its sole discretion, offset against SUBSEQUENT
PAYMENT any and all losses, claims, damages (including lost
profits, consequential damages, interest, penalties, fines and
monetary sanctions), liabilities and costs incurred or suffered
by XFL and for which XFL is entitled to be indemnified in this
AGREEMENT.
9 NON-COMPETE COVENANT
Each of the VENDORS jointly and severally undertake and covenant to XFL
that from the date of this AGREEMENT and for such a period as the Exclusive
Advertisement AGREEMENT remains effective, neither it nor any of its
AFFILIATES will, and it shall procure that no PERSON who is, on the date of
this AGREEMENT or immediately prior to the CLOSING, its shareholder, owner,
director, officer or legal representative will:
(a) either on its own account or through any of its AFFILIATES, or in
conjunction with or on behalf of any other PERSON, will carry on or be
engaged, concerned or interested directly or indirectly whether as
shareholder, director, employee, partner, agent or otherwise carry on
any business in competition with the businesses of EOPO or JGXC; and
(b) either on its own account or through any of its AFFILIATES or in
conjunction with or on behalf of any other PERSON, employ, solicit or
entice away or attempt to employ, solicit or entice away from EOPO or
JGXC any person for the purpose of carrying on any business in direct
competition with the business of EOPO or JGXC who is or shall have
been at the date of or within twelve (12) months prior to such
cessation a director, officer, legal representative, manager,
consultant or employee of EOPO or JGXC whether or not such person
would commit a breach of contract by reason of leaving such
employment.
10 TERMINATION
10.1 Termination. This AGREEMENT may be terminated at any time prior to
CLOSING:
(a) by XFL if, between the date hereof and the CLOSING: (i) there is
a MATERIAL ADVERSE CHANGE, or (ii) any representations and
warranties made by a PERSON other than XFL contained in any
TRANSACTION DOCUMENT shall not have been true and correct in any
material respect when made or at the CLOSING or any time
14
in between, or (iii) any party shall not have complied in all
material respects with the covenants or agreements contained in
any TRANSACTION Document to be complied with by it, or (iv) any
company or any PERSON who is a party to any of the TRANSACTION
DOCUMENTS makes a general assignment for the benefit of
creditors, or any proceeding shall be instituted by or against
such company or PERSON seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up or reorganization,
arrangement, adjustment, protection, relief or composition of its
debts under any law related to bankruptcy, insolvency or
reorganization;
(b) by the VENDORS (acting together) if, between the date hereof and
the CLOSING: (i) any representations and warranties of XFL
contained in this AGREEMENT shall not have been true and correct
in any material respect when made, (ii) XFL shall not have
complied in all material respects with the covenants or
agreements contained in this AGREEMENT to be complied with by it
or (iii) any proceeding shall be instituted by or against XFL
seeking to adjudicate XFL bankrupt or insolvent, or seeking
liquidation, winding up or reorganization, arrangement,
adjustment, protection, relief or composition of its debts under
any law related to bankruptcy, insolvency or reorganization;
(c) XFL or the VENDORS (acting together) if the CLOSING shall not
have occurred by September 30, 2006; provided, however, that the
right to terminate this AGREEMENT under this Clause 10.1(c) shall
not be available to any PARTY whose failure to fulfil any
obligation under this AGREEMENT shall have been the cause of, or
shall have resulted in, the failure of the CLOSING to occur on or
prior to such date; or
(d) by the mutual written consent of XFL and the VENDORS (acting
together).
10.2 Effect of Termination.
(a) In the event of termination of this AGREEMENT as provided in
Clause 10.1, this AGREEMENT (other than clauses 1, 8, 10, 11.3,
11.4, 11.7 and 11.8) shall forthwith become void provided that
nothing herein shall relieve any party hereto from liability for
any breach of this AGREEMENT.
(b) In the event of termination of this AGREEMENT, the VENDORS shall
forthwith return all the CONSIDERATION that has been paid or
delivered by XFL or XFL NOMINEE.
11 MISCELLANEOUS
11.1 Survival of WARRANTIES. The representations, warranties and covenants
contained in or made pursuant to this AGREEMENT shall survive the
execution and delivery of this AGREEMENT and the CLOSING and shall in
no way be affected by any investigation of the subject matter thereof
made by or on behalf of XFL.
11.2 Designation of Representative. The VENDORS assume joint and several
liabilities for their obligations under the TRANSACTION DOCUMENTS. The
VENDORS hereby jointly and irrevocably appoint and designate [SANLIAN]
to act on behalf of the VENDORS for the purposes of receiving the
relevant notice, deciding, confirming and agreeing on the matters
under this AGREEMENT.
11.3 Successors and Assigns. Except as otherwise provided herein, the terms
and conditions of this AGREEMENT shall inure to the benefit of and be
binding upon the respective
15
successors and assigns of the Parties. Nothing in this AGREEMENT,
express or implied, is intended to confer upon any party other than
the Parties hereto or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of
this AGREEMENT, except as expressly provided in this AGREEMENT.
11.4 Governing Law. This AGREEMENT shall be governed by and construed in
accordance with the laws of Hong Kong.
11.5 Arbitration. Any dispute, controversy or claim arising out of or
relating to this AGREEMENT, or the breach, termination or invalidity
thereof, shall be submitted to Hong Kong International Arbitration
Centre and settled by binding arbitration in accordance with the
UNCITRAL Arbitration Rules as present in force. in the manner set
forth in this Clause 11.5. The procedures of this Clause 11.5 may be
initiated by a written notice (a "DISPUTE NOTICE") given by one party
(a "CLAIMANT") to the other, but not before thirty (30) days have
passed during which the parties have been unable to reach a
resolution. The DISPUTE NOTICE shall be accompanied by (i) a statement
of the CLAIMANT describing the dispute in reasonable detail and (ii)
documentation, if any, supporting the CLAIMANT's position on the
dispute. Within twenty (20) days after the other party's (the
"RESPONDENT") receipt of the DISPUTE NOTICE and accompanying
materials, the dispute shall be resolved by binding arbitration in
Hong Kong under the UNCITRAL Arbitration Rules. All arbitration
procedures pursuant to this paragraph (a) shall be confidential and
treated as compromise and settlement negotiations and shall not be
admissible in any arbitration or other proceeding.
11.6 Counterparts. This AGREEMENT may be executed in five or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
11.7 Titles and Subtitles. The titles and subtitles used in this AGREEMENT
are used for convenience only and are not to be considered in
construing or interpreting this AGREEMENT.
11.8 Notices. Unless otherwise provided, any notice required or permitted
under this AGREEMENT shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified
or upon postal service delivery, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the
address indicated for such party on the signature page hereof or by
facsimile at the facsimile number set out on the signature page
hereof, or at such other address or facsimile number as such party may
designate by two (2) days' prior written notice to the other parties.
The addresses and fax numbers of the parties for the purpose of clause
11.8 above are as follows:
XFL:
Address: Suite 2003-4 Vicwood Plaza, 1
99 Des Voeux Road Central, Hong Kong
Fax: (852) 25418266
For the attention of: Mr. John McLean
SANLIAN:
Address: No. 20, Quetuquan Road North, Jinan City
Fax: 0086 (531)86099847
For the attention of: Mr. Zhu Aijun
16
SEOC
Address: Block 7, Hengping Avenue, Dongcheng District,
Beijing
Fax: (86) (10) 64297071
For the attention of: Ms. Zhang Lijuan
EOPO
Address: Block 7, Hengping Avenue, Dongcheng District,
Beijing
Fax: (86) (10) 64297071
For the attention of: Ms. Zhang Lijuan
JGXC
Address: Block 7, Hengping Avenue, Dongcheng District,
Beijing
Fax: (86) (10) 64297071
For the attention of: Ms. Zhang Lijuan
11.9 Expenses. Each of the parties hereto shall be responsible for its own
costs and expenses incurred in the preparation, negotiation and
execution of this AGREEMENT.
11.10 Severability. If one or more provisions of this AGREEMENT are held to
be unenforceable under applicable law, such provision shall be
excluded from this AGREEMENT and the balance of the AGREEMENT shall be
interpreted as if such provision was so excluded and shall be
enforceable in accordance with its terms.
11.11 Entire AGREEMENT. The TRANSACTION DOCUMENTS supersedes all other
agreements and constitute the entire agreement among the PARTIES and
no party shall be liable or bound to any other party in any manner by
any warranties, representations, or covenants except as specifically
set forth herein or therein.
- EXECUTION PAGE FOLLOWS -
17
IN WITNESS WHEREOF, the parties have executed this AGREEMENT as of the date
first above written.
XFL
For and on behalf of XINHUA FINANCE LIMITED
Per:
/s/ Fredy Bush
-------------------------------------
Authorized Signatory
SEOC
For and on behalf of SHANDONG ECONOMIC OBSERVER CO., LTD.
Per:
[Company chop of Shandong Economic Observer Co., Ltd.]
/s/
-------------------------------------
Authorized Signatory
SANLIAN
For and on behalf of SHANDONG SANLIAN GROUP CO., LTD.
Per:
[Company chop of Shandong Sanlian Group Co., Ltd.]
/s/
-------------------------------------
Authorized Signatory
EOPO
For and on behalf of ECONOMIC OBSERVER PRESS OFFICE
Per:
[Economic Observer Press Office]
/s/
-------------------------------------
Authorized Signatory
JGXC
For and on behalf of BEIJING JINGGUANXINCHENG ADVERTISING CO., LTD.
Per:
[Beijing JingGuanXinCheng Advertising Co., Ltd.]
/s/
-------------------------------------
Authorized Signatory
18
SCHEDULE A
CORPORATE DETAILS OF JGXC
[Download Table]
Date and place of Incorporation 25 January 2006, Fang Shan District, Beijing,
PRC
Registered Address 18-C66, Construction Road, Kaixuan Main
Street, Fang Shan District, Beijing
Registered capital RMB5,000,000
Paid in capital RMB5,000,000
Shareholder 100% owned by SEOC
DIRECTORS ZHAO LI
19
SCHEDULE B
CLOSING CONDITIONS PRECEDENT
XFL's obligations to consummate the transactions contemplated by this AGREEMENT
is subject to the fulfilment of each of the following conditions:
(a) The TRANSACTION DOCUMENTS have been entered into by each of the parties
thereto and become effective in a manner satisfactory to XFL;
(b) SEOC and JGXC have completed the registrations with the local
administration of industry and commerce of (i) the transfer of the EQUITY
by SEOC to XFL NOMINEE; and (ii) the Amended Articles of Association; and
(iii) appointment of new DIRECTORS to the BOARD, three of which are
nominated by XFL;
(c) JGXC has obtained all licenses, permission, authorizations or Consent
required by the PRC laws for completion of the TRANSACTION and carrying on
the business lawfully and effectively in the manner as contemplated under
the TRANSACTION DOCUMENTS, including without limitation the relevant
advertisement permit for the exclusive advertisement agency;
(d) The EVENT COMPANY has been duly established jointly by JGXC and ECONWORLD
and registered with the local administration of industry and commerce
pursuant to terms and conditions contained in the articles of association
of the EVENT COMPANY as set out in Appendix [8] attached hereto;
(e) The INFORMATION CONSULTING COMMITTEE has been duly established pursuant to
the ECC AGREEMENT;
(f) The TRANSACTION has been approved by the board of directors of XFL;
(g) All regulatory approvals, registrations and filings for the TRANSACTION
have been obtained or completed; and
(h) Any other conditions XFL may reasonably request.
20
SCHEDULE C
DOCUMENTS DELIVERABLES AT OR PRIOR TO CLOSING
(a) THE VENDORS and JGXC shall deliver (or cause to be delivered) to XFL at or
prior to the CLOSING the executed original versions (or copies where XFL
has agreed that copies are acceptable) of all of the agreements,
resolutions, certificates, approvals and documents referred to in Clause
2.1 and all other documents relying on which XFL has determined that the
CLOSING CONDITIONS PRECEDENT set out in Schedule B have been fulfilled.
(b) Without limiting the generality of the forgoing, JGXC shall:
(i) issue to XFL a capital contribution certificate, to the satisfaction
of XFL, evidencing XFL NOMINEE's holding of 50% equity interest in the
registered capital of JGXC;
(ii) delivers to XFL an original or verified copy of record of shareholders
document, to the satisfaction of XFL, evidencing XFL NOMINEE's holding
of 50% equity interest in the registered capital of JGXC;
(iii) deliver to XFL a certificate evidencing that number of the DIRECTORS
of the BOARD of JGXC has been changed into five (5), among which, all
the three (3) DIRECTORS appointed by XFL and the chairman appointed by
SANLIAN have been duly registered with the administration for industry
and commerce as the DIRECTORS of JGXC; and such other papers and
documents as XFL may reasonably require;
(iv) deliver to the representative nominated by XFL all of the records,
chops, registers, minute books, files, approvals, permits, licenses,
certificates and other statutory books of JGXC, and the original or
effective duplicate of any legal certificate and document required for
the effective management of JGXC; and
(v) shall take all the necessary corporate actions and pass all the
necessary resolutions by its shareholder and the executive director to
approve the signing and performance of all the relevant contracts,
agreements and other documents in relation hereto.
(c) Without limiting the generality of the forgoing, SANLIAN shall deliver the
indemnification letter duly executed by it in AGREED FORM as set out in
Schedule I.
21
SCHEDULE D
VENDORS WARRANTIES
PART A: GENERAL
(a) Full Disclosure. (i) SANLIAN, SEOC, EOPO and JGXC are not aware of any
facts which could materially adversely affect themselves or which are
likely in the future to materially adversely affect any of them and which
have not been disclosed to XFL by or on behalf of JGXC in connection with
or pursuant to this AGREEMENT. (ii) No representation or warranty in this
AGREEMENT, nor any statement or certificate furnished or to be furnished to
XFL pursuant to or in connection with this AGREEMENT contains or will
contain any untrue statement of material fact, or omits or will omit to
state a material fact necessary to make the statements contained herein or
therein misleading.
(b) Reliance. The following representations and warranties are made by SANLIAN,
SEOC, EOPO and JGXC with the knowledge and expectation that XFL is placing
reliance thereon.
PART B: WARRANTIES IN RESPECT OF the VENDORS AND JGXC IN GENERAL
(a) Organization, Standing, and Power. It is a company or legal person entity
duly organized and validly existing, and in good standing under the laws of
the PRC, has all requisite corporate power and authority to carry on its
businesses, and is duly qualified and in good standing to do business in
each jurisdiction in which it conducts business.
(b) Authorization. The execution, delivery, and performance of the TRANSACTION
DOCUMENTS to be entered into by it have been duly authorized by all
necessary action of its board or other appropriate organization. Certified
copies of the resolutions adopted by its board or other appropriate
organization approving the TRANSACTION DOCUMENTS and transactions
contemplated hereby and thereby have been provided to XFL.
(c) Execution. It has duly and validly executed and delivered the TRANSACTION
DOCUMENTS naming it as a party, and such TRANSACTION DOCUMENTS constitute
valid, binding, and enforceable obligations of it in accordance with their
terms, except to the extent that enforceability may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is
considered in a proceeding at law or in equity.
PART C: WARRANTIES IN RESPECT OF JGXC
(a) Corporate Records. It has made available to XFL complete and correct copies
of all the documents, including but not limited to, its business license,
articles of association, tax registration certificates, registers and/or
other organizational documents ("CONSTITUTIONAL DOCUMENTS"), in each case,
as amended to the date hereof. It has delivered to XFL complete and correct
copies of its minute books and corporate records, all of which contain
correct and complete records of all proceedings and actions taken at all
meetings of, or effected by written consent of, its shareholders and its
BOARD of DIRECTORS, and all original issuances and subsequent transfers,
repurchases, and cancellations of its shares.
(b) Capital Structure.
22
(i) Set out in Schedule A is its registered capital on the date hereof.
(ii) There are no options, warrants, calls, conversion rights, commitments,
agreements, contracts, restrictions, or rights of any character to
which it is a party or by which it may be bound obligating it to
issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares, or obligating it to grant, extend or enter into any
such option, warrant, call, conversion right, commitment, agreement,
contract, understanding, restriction, arrangement or right. It does
not have outstanding bonds, debentures, notes or other indebtedness.
(c) Subsidiaries. It does not presently own or CONTROL, directly or indirectly,
any interest in any other company, association, or other business entity,
and is not a participant in any joint venture, partnership, or similar
arrangement. Its particulars as set out in Schedule A and its registered
capital are clear of all ENCUMBRANCEs. Save as expressly provided in the
TRANSACTION DOCUMENTS, there is no agreement or arrangement in force which
calls for the present or future issue or sale of, or grant to any person
the right (whether conditional or otherwise) to call for the issue, sale or
transfer of any of its share or loan capital (including any of its option,
notes, warrants or other securities or rights convertible or ultimately
convertible into shares or equity interests).
(d) Compliance with Laws and Other Instruments. It holds and, at all times, has
held all licenses, permits, and authorizations from all Governmental
Entities necessary for the lawful conduct of its business pursuant to all
applicable PRC statutes, laws, ordinances, rules, and regulations of all
such authorities having jurisdiction over it or any part of its operations.
There are no violations or claimed violations of any such license, permit,
or authorization, or any such statute, law, ordinance, rule or regulation.
It has conducted its activities in compliance with all applicable laws and
regulations and there has been no breach of any laws or regulations
applicable to it.
(e) Corporate Governance. Neither the execution and delivery of the TRANSACTION
DOCUMENTS naming it as a party nor the performance by it of its obligations
under such TRANSACTION DOCUMENTS will (i) conflict with or result in any
breach of its CONSTITUTIONAL DOCUMENTS; (ii) require any CONSENTS; or (iii)
conflict with, result in a breach or default of, or give rise to any right
of termination, cancellation or acceleration or result in the creation of
any lien, charge, ENCUMBRANCE, or restriction upon any of the properties or
assets of it or its shares under, any law, statute, rule, regulation,
judgment, decree, order, government permit, license or order or any
mortgage, indenture, note, license, trust, agreement or other agreement,
instrument or obligation to which it is a party.
(f) Absence of Certain Changes and Events. Since its establishment, there has
not been:
(i) Any transaction entered into by it other than in the ordinary course
of business;
(ii) Any declaration, payment, or setting aside of any dividend or other
distribution to or for any of the holders of any equity;
(iii) Any termination, modification, or rescission of or waiver by it of
rights under any contract having or reasonably likely to have a
MATERIAL ADVERSE CHANGE on its business;
(iv) Any discharge or satisfaction by it of any ENCUMBRANCE, or any payment
of any obligation or liability (absolute or contingent) other than
liabilities incurred since its establishment in the ordinary course of
business;
23
(v) Any mortgage, pledge, imposition of any security interest, claim,
ENCUMBRANCE, or other restriction created on any of the assets,
tangible or intangible, of it having or reasonably likely to have a
MATERIAL ADVERSE CHANGE on its business;
(vi) Any settlement amount of any claim, dispute, suit, proceeding or
investigation regarding it; or
(vii) Any event or condition resulting in a MATERIAL ADVERSE CHANGE on its
business.
(g) Litigation and Other Proceedings. It is not nor is any of its officers,
directors, or employees a party to any pending or, threatened action, suit,
labour dispute (including any union representation proceeding), proceeding,
investigation, or discrimination claim in or by any court or governmental
board, commission, agency, department, or officer, or any arbitrator,
arising from its actions or omissions or, in the case of an individual,
from acts in his or her capacity as its officer, director, employee, agent
or contractor, which individually or in the aggregate would have a MATERIAL
ADVERSE CHANGE on its business. It is not a named party to any order, writ,
judgment, decree, or injunction.
(h) No Defaults. It is not, nor has it received written notice that it would be
with the passage of time, in default or violation of any term, condition,
or provision of (i) its CONSTITUTIONAL DOCUMENTS; (ii) any judgment,
decree, or order to which it is a named party; or (iii) any loan or credit
agreement, note, bond, mortgage, indenture, contract, agreement, lease,
license, or other instrument to which it is a party or by which it or any
of its properties or assets is bound, except for defaults and violations
which have been cured or, individually or in the aggregate, would not have
a MATERIAL ADVERSE CHANGE on its business.
(i) Major Contracts. Except for the agreements set out in Schedule J (the
"EXISTING CONTRACTS") it is not a party to or bound by any agreement,
contract, lease or indemnity:
All the EXISTING CONTRACTS are valid and in full force and effect and it
has not nor has any other party thereto breached any material provisions
of, or entered into default in any material respect under the terms thereof
other than such beaches or defaults that have been cured or would not,
individually or in the aggregate, have a MATERIAL ADVERSE CHANGE on its
business. It has made available to XFL a copy of each of the EXISTING
CONTRACTS specified in Schedule J together with all amendments, material
written waivers or other material written changes thereto.
(j) Assets. The assets owned, possessed or used by it comprise all the assets
required to enable it to carry on its business fully and effectively in the
ordinary course. It has legal and beneficial ownership of all assets owned,
possessed or used by it free and clear of all ENCUMBRANCEs. No other PERSON
owns any property and assets which are being used by it except for the
property leased by it pursuant to the EXISTING CONTRACTS.
(k) Employees. It has no written or oral contract of employment or other
employment agreement with any of its employees (including any contracts
relating to the temporary use or loaning of employees) that are not
terminable at will by it without payment of severance or termination
payments or benefits. It is not a party to any pending or threatened labour
dispute concerning its business or employment practices or the subject of
any organizing drive, labour grievance or petition to certify a labour
union. It has complied with all applicable laws, treaties, ordinances,
rules, and regulations and requirements relating to the employment of
labour. There are no claims pending or threatened to be brought against it
in any court or administrative agency by any of its former or current
employees.
(l) Certain Agreements. Neither the execution nor delivery of this AGREEMENT
and the TRANSACTION DOCUMENTS nor the performance of its obligations
contained in them will:
24
(i) result in any payment by it (including severance, unemployment
compensation, parachute payment, bonus or otherwise) becoming due to
any director, employee, or independent contractor of it under any
employee benefit plan, agreement, or otherwise,
(ii) increase any benefits otherwise payable under any employee benefit
plan or agreement, or (iii) result in the acceleration of the time of
payment or vesting of any such benefits.
(m) Guarantees and Suretyships. It does not have any powers of attorney
outstanding and it does not have any obligations or liabilities (absolute
or contingent) as guarantor, surety, cosigner, endorser, co-maker, or
otherwise respecting the obligations or liabilities of any person,
corporation, partnership, joint venture, association, organization, or
other entity other than as an endorser of negotiable instruments in the
ordinary course of business.
(n) Absence of Questionable Payments. It has not nor has any of its respective
AFFILIATES, directors, officers, agents, employees or other persons acting
on their behalf, used any corporate or other funds for unlawful
contributions, payments, gifts, or entertainment, or made any unlawful
expenditures relating to political activity to government officials or
others or established or maintained any unlawful or unrecorded funds. It
has not nor has any of its respective AFFILIATES, directors, officers,
agents, employees or other persons acting on its behalf, accepted or
received any unlawful contributions, payments, gifts, or expenditures.
(o) [It has not conducted any business and has no indebtedness, receivable,
liability or contingent liability.]
(p) Taxes.
(i) No deficiencies or adjustments for any of its tax has been claimed,
proposed or assessed or threatened in writing and not paid. There is
currently no claim outstanding by an authority in a jurisdiction where
it does not file PRC Returns that it is or may be subject to taxation
by that jurisdiction. It is not subject to any pending or threatened
tax audit or examination. It has not entered into any agreements,
waivers or other arrangements in respect of the statute of limitations
in respect of its taxes or PRC Returns.
(ii) For the purposes of this AGREEMENT, the terms "tax" and "taxes" shall
include all taxes, assessments, duties, tariffs, registration fees,
and other governmental charges in the nature of taxes including, all
income, franchise, property, production, sales, use, payroll, license,
windfall profits, value added, severance, withholding, excise, gross
receipts and other taxes, as well as any interest, additions or
penalties relating thereto and any interest in respect of such
additions or penalties.
(q) Leases in Effect; Real Estate. All real property leases and subleases to
which it is a party, and any amendments or modifications thereof, are
listed in Schedule K (each a "PRC LEASE" and, collectively, the "PRC
LEASES"). It has a valid leasehold interest under such PRC LEASES. There
are no existing defaults, and it has not received or given any written
notice of default or claimed default with respect to any PRC LEASE and
there is no event that with notice or lapse of time, or both, would
constitute a default thereunder. All real property occupied by it is
subject to a written lease. It holds no interest in real property other
than the PRC LEASES.
(r) Personal Property. It has valid title, free and clear of all title defects,
security interests, pledges, options, claims, liens, and ENCUMBRANCEs of
any nature whatsoever to all inventory, receivables, furniture, machinery,
equipment, and other personal property, tangible since its establishment.
25
PART D: WARRANTIES IN RESPECT OF EOPO AND THE NEWSPAPER
(a) Compliance with Laws and Other Instruments. EOPO holds and, at all times,
has held all licenses, permits, and authorizations from all Governmental
Entities necessary for the lawful conduct of its business pursuant to all
applicable PRC statutes, laws, ordinances, rules, and regulations of all
such authorities having jurisdiction over it or any part of its operations,
including without limitation the editing, publishing and distribution of
the News paper and advertising. There are no violations or claimed
violations of any such license, permit, or authorization, or any such
statute, law, ordinance, rule or regulation. It has conducted its
activities in compliance with all applicable laws and there has been no
breach of any laws applicable to it.
(b) Absence of Certain Changes and Events. Since December 31, 2005, there has
not been:
(i) Any transaction other than in the ordinary course of business;
(ii) Any termination, modification, or rescission of or waiver by it of
rights under any contract having or reasonably likely to have a
MATERIAL ADVERSE CHANGE on its business;
(iii) Any discharge or satisfaction by it of any ENCUMBRANCE, or any
payment of any obligation or liability (absolute or contingent) other
than liabilities incurred in the ordinary course of business;
(iv) Any mortgage, pledge, imposition of any security interest, claim,
ENCUMBRANCE, or other restriction created on any of the assets,
tangible or intangible, of it having or reasonably likely to have a
MATERIAL ADVERSE CHANGE on its business;
(v) Any claim, dispute, law suit, proceeding or investigation against or
regarding it; or
(vi) Any event or condition resulting in a MATERIAL ADVERSE CHANGE on its
business.
(c) Litigation and Other Proceedings. EOPO is not nor is any of its officers,
directors, or employees a party to any pending or, threatened action, suit,
labour dispute (including any union representation proceeding), proceeding,
investigation, or discrimination claim in or by any court or governmental
board, commission, agency, department, or officer, or any arbitrator,
arising from its actions or omissions or, in the case of an individual,
from acts in his or her capacity as its officer, director, employee, agent
or contractor, which individually or in the aggregate would have a MATERIAL
ADVERSE CHANGE on its business. It is not a named party to any order,
judgment, decree, or injunction.
(d) No Defaults. EOPO is not, nor has it received written notice that it would
be with the passage of time, in default or violation of any term,
condition, or provision of (i) its CONSTITUTIONAL DOCUMENTS; (ii) any
judgment, decree, or order to which it is a named party; or (iii) any loan
or credit agreement, note, bond, mortgage, indenture, contract, agreement,
lease, license, or other instrument to which it is a party or by which it
or any of its properties or assets is bound, except for defaults and
violations which have been cured or, individually or in the aggregate,
would not have a MATERIAL ADVERSE CHANGE on its business.
(e) Newspaper Licenses EOPO has duly obtained and maintained all the licenses
and permits to conduct the current business, including but not limited to
the NEWSPAPER Publishing License, and has not conducted the business
outside the scope of such licenses and permits.
(f) Material Contracts. Except for the contracts listed in Schedule J, EOPO is
not a party to any agreement or contract which is related to the subject
matter of any TRANSACTION DOCUMENTS or which may affect the performance of
such TRANSACTION DOCUMENTS, in particular any
26
agreement or contract in connection with any advertisement related matters,
or any agreement, contract or arrangement entered into by and between EOPO
and SEOC.
EOPO has terminated the contracts, or assigned to JGXC the benefits and
obligations thereof, in a manner as set forth in Schedule J pending or by
the CLOSING DATE and there are no circumstances by reason of such
termination EOPO shall be liable to any other third parties.
(g) Assets. The assets owned, possessed or used by EOPO comprise all the assets
required to enable it to carry on its business fully and effectively in the
ordinary course. It has legal and beneficial ownership of all assets owned,
possessed or used by it free and clear of all ENCUMBRANCEs.
(h) Technology and Intellectual Property Rights.
(i) Schedule L contains a list of INTELLECTUAL PROPERTY which includes the
following:
(1) all patents, domain names, trademarks, trade names, trade dress
and service marks, and any applications and registrations for any
of the foregoing, that is included in the OWNED INTELLECTUAL
PROPERTY;
(2) all registered copyrights, and applications for registered
copyrights for any OWNED INTELLECTUAL PROPERTY;
(3) all material products and services that currently are published
and/or offered by it, or that are currently under development by
it and scheduled to be commercially released or offered prior to
the CLOSING DATE;
(4) all material licenses and sublicenses of OWNED INTELLECTUAL
PROPERTY;
(5) all LICENSED INTELLECTUAL PROPERTY and any sublicenses thereto;
and
(6) any material obligation of exclusivity, non-competition,
non-solicitation, first negotiation or "most favoured nation" or
"equally favoured nation" (e.g., obligating it to provide terms
as favourable or more favourable as granted to others) to which
it is subject under any agreement that does not fall within the
ambit of (4) or (5) in this paragraph.
(ii) EOPO owns or has the right to use all INTELLECTUAL PROPERTY used or
held for use in the conduct of its business without any conflict with
the rights of others. All products and technology that have been or
currently are published and/or offered by it or are under development
by it, and all products and/or technology underlying any and all
services that have been or currently are offered by it or are under
development by it is either: (1) owned by it, (2) in the public
domain, or (3) rightfully used by the it pursuant to a valid written
license or other agreement.
(iii) EOPO is not, as a result of the execution or delivery of this
AGREEMENT and/or the Ancillary AGREEMENTs, nor the performance of its
obligations under them of under the Structure AGREEMENTs will cause it
to be in violation of any license, sublicense or other agreement
relating to the INTELLECTUAL PROPERTY or of any non-disclosure
agreement to which it is a party or otherwise bound.
(iv) EOPO is not obligated to provide any financial consideration or other
consideration to any third party, nor is any third party otherwise
entitled to any financial consideration or other consideration, with
respect to any exercise of rights by it or its successors in the
INTELLECTUAL PROPERTY.
27
(v) EOPO's use, reproduction, modification, distribution, licensing,
sublicensing, sale, or any other exercise of rights in any OWNED
INTELLECTUAL PROPERTY by it or its licensees does not infringe,
misappropriate or violate any copyright, patent, trade secret,
trademark, service mark, trade name, firm name, logo, trade dress,
database right, other intellectual property right, right of privacy,
right of publicity or right in personal or other data of any person.
Further, the use, reproduction, modification, distribution, licensing,
sublicensing, sale, or any other exercise of rights in any LICENSED
INTELLECTUAL PROPERTY or any other authorized exercise of rights in or
to LICENSED INTELLECTUAL PROPERTY by it or its licensees does not
infringe, misappropriate or violate any copyright, patent, trade
secret, trademark, service mark, trade name, firm name, logo, trade
dress, moral right, database right, other intellectual property right,
right of privacy, right of publicity or right in personal or other
data of any person. Further, the distribution, licensing,
sublicensing, sale, or other provision of products and services by it
or its resellers or licensees does not infringe, misappropriate or
violate any copyright, patent, trade secret, trademark, service mark,
trade name, firm name, logo, trade dress, moral right, database right,
other intellectual property right, right of privacy, right of
publicity or right of any person.
(vi) No action, suit or proceeding, pending or otherwise, (i) challenging
the validity, enforceability, or ownership by it of any of OWNED
INTELLECTUAL PROPERTY or (ii) to the effect that the use,
reproduction, modification, manufacturing, distribution, licensing,
sublicensing, sale or any other exercise of rights in any OWNED
INTELLECTUAL PROPERTY by it or its licensees infringes,
misappropriates or violates any intellectual property or other
proprietary or personal right of any person is pending or is
threatened by any person. Further, no claim to the effect that the
distribution, licensing, sublicensing, sale or other provision of
products and services by it or its resellers or licensees infringes,
misappropriates or violates any intellectual property or other
proprietary or personal right of any person is pending or, to the
knowledge of EOPO, is threatened by any person. There is no
unauthorized use, infringement or misappropriation of any of OWNED
INTELLECTUAL PROPERTY by any third party, employee or former employee.
(vii) No other party has any security interest in any INTELLECTUAL
PROPERTY.
(viii) EOPO has secured from all parties who have created any portion of,
or otherwise have any rights in or to, OWNED INTELLECTUAL PROPERTY,
other than employees of itself whose work product was created by them
entirely within the scope of their employment by it and constitutes
work made for hire owned by it, valid written assignments or licenses
of any such work or other rights to it that are enforceable by it and
has made available true and complete copies of such assignments or
licenses to XFL.
(ix) EOPO owns all right, title and interest in and to all data it collects
from or discloses about users of its products and services. Its
practices regarding the collection and use of consumer personal
information are in accordance in all respects with applicable laws and
regulations of all jurisdictions in which it operates.
(x) No officer, director, stockholder or employee of EOPO, nor any spouse,
or relative thereof, owns directly or indirectly, in whole or in part,
any INTELLECTUAL PROPERTY.
(i) Employees. EOPO has no written or oral contract of employment or other
employment agreement with any of its employees (including any contracts
relating to the temporary use or loaning of employees) that are not
terminable at will by it without payment of severance or termination
payments or benefits. It is not a party to any pending or threatened labour
dispute concerning its business or employment practices or the subject of
any organizing drive, labour grievance or petition to certify a labour
union. It has complied with all applicable laws, treaties, ordinances,
rules, and regulations and requirements relating to the employment of
labour.
28
There are no claims pending or threatened to be brought against it in any
court or administrative agency by any of its former or current employees.
The core employees are and will remain employed by the EOPO (for avoidance
of any doubt, "core" employee in this paragraph means the employee whom XFL
may consider essential to EOPO or its business).
(j) Certain Agreements. Neither the execution and delivery of this AGREEMENT
and the Ancillary AGREEMENTs nor the performance of its obligations
contained in them will: (i) result in any payment by EOPO (including
severance, unemployment compensation, parachute payment, bonus or
otherwise) becoming due to any director, employee, or independent
contractor of it under any employee benefit plan, agreement, or otherwise,
(ii) increase any benefits otherwise payable under any employee benefit
plan or agreement, or (iii) result in the acceleration of the time of
payment or vesting of any such benefits.
(k) Guarantees and Suretyships. EOPO does not have any powers of attorney
outstanding and it does not have any obligations or liabilities (absolute
or contingent) as guarantor, surety, cosigner, endorser, co-maker, or
otherwise respecting the obligations or liabilities of any person,
corporation, partnership, joint venture, association, organization, or
other entity other than as an endorser of negotiable instruments in the
ordinary course of business.
(l) Absence of Questionable Payments. EOPO has not nor has any of its
respective AFFILIATES, directors, officers, agents, employees or other
persons acting on their behalf, used any corporate or other funds for
unlawful contributions, payments, gifts, or entertainment, or made any
unlawful expenditures relating to political activity to government
officials or others or established or maintained any unlawful or unrecorded
funds. It has not nor has any of its respective AFFILIATES, directors,
officers, agents, employees or other persons acting on its behalf, accepted
or received any unlawful contributions, payments, gifts, or expenditures.
(m) Financial Statements. All financial statemdens delivered to XFL give a true
and fair view of the financial status as of the relevant account dates.
Each statement either has made full provision or disclosed all liabilities,
claims or obligations of any nature, whether absolute, contingent,
anticipated or otherwise, whether due or to become due, all outstanding
capital commitments and all bad or doubtful debts as of the relevant
account dates.
(n) Taxes.
(i) No deficiencies or adjustments for any of its tax has been claimed,
proposed or assessed or threatened in writing and not paid. It is not
subject to any pending or threatened tax audit or examination.
(ii) For the purposes of this AGREEMENT, the terms "tax" and "taxes" shall
include all taxes, assessments, duties, tariffs, registration fees,
and other governmental charges in the nature of taxes including, all
income, franchise, property, production, sales, use, payroll, license,
windfall profits, value added, severance, withholding, excise, gross
receipts and other taxes, as well as any interest, additions or
penalties relating thereto and any interest in respect of such
additions or penalties.
(iii) There are no liens for taxes upon its assets except for taxes that
are not yet payable. It has withheld all taxes required to be withheld
in respect of wages, salaries and other payments to all employees,
officers and directors and any taxes required to be withheld from any
other person and has timely paid all such amounts withheld to the
proper taxing authority.
PART E: WARRANTIES IN RESPECT OF SEOC
29
(a) Material Contracts. Except for the contracts listed in Schedule J, SEOC is
not a party to any agreement or contract which is related to the subject
matter of any TRANSACTION DOCUMENTS or which may affect the performance of
such TRANSACTION DOCUMENTS, in particular any agreement or contract in
connection with any advertisement related matters, or any agreement,
contract or arrangement entered into by and between EOPO and SEOC.
SEOC has terminated the contracts, or assigned to JGXC the benefits and
obligations thereof, in a manner as set forth in Schedule J pending or by
the CLOSING DATE and there are no circumstances by reason of such
termination EOPO shall be liable to any other third parties.
30
SCHEDULE E
XFL WARRANTIES
XFL hereby represents and warrants to the VENDORS that each of the following
statements is true:
(a) Organisation and Qualification. It is a person or a legal entity duly
organised and validly existing under the laws of its jurisdiction of
incorporation.
(b) Authorisation. It has taken all corporate or other action required to
authorise, and has duly authorised, the execution, delivery and performance
of this AGREEMENT and upon due execution and delivery the same will
constitute its legal, valid and binding obligations enforceable in
accordance with its terms.
(c) Power and Authority. It has full power and authority to make the covenants
and representations referred to herein and to purchase the EQUITY and to
execute, deliver and perform this AGREEMENT.
31
SCHEDULE F
DETAILS OF ECONWORLD
Company name Guangzhou Jingshi Culture Intermediary Co.,
Ltd.
Date and place of Incorporation 23 March 2006, Tian He District, Guangzhou,
PRC
Registered Address Rm.340, 36, Nanshe Main Street, Chengjie Road,
Tian He District, Guangzhou
Registered capital RMB1,000,000
Paid in capital RMB1,000,000
32
SCHEDULE G
MANAGEMENT TEAM OF JGXC AND EVENT COMPANY
[List of names of management personnels of JGXC and the Event Company]
33
SCHEDULE H
MANAGEMENT CONTRACT
[Management contract Between JGXC and (or Jingguan Jingshi) with its executives]
34
SCHEDULE I
INDEMNIFICATION LETTER
TO: XINHUA FINANCE LIMITED.
1. The undersigned, Zhang Jikai, is the representative duly authorised by
Shandong Sanlian Group Co., (referred to as "SANLIAN" hereinafter), who is
the controlling shareholder of Shandong Economic Observer Co., Ltd.
(referred to as "SEOC" hereinafter), a company established and existing
pursuant to the laws of the PRC with the registered office at No.12,
Quetuquan Road North, Jinan City. SANLIAN is also the sponsor and
supervisor of Economic Observer Press Office (referred to as EOPO
hereinafter), an unincorporated legal entity established under the laws of
PRC with the registered office at Gao'er People's Government, Licheng
District, Jinan City.
2. SANLIAN, together with SEOC and EOPO (collectively as "VENDORS"), signed a
"Cooperation Agreement in relation to Economic Observer" (the AGREEMENT)
with your company on [______], 2006 (the term of which is specified in the
AGREEMENT).
3. After due consideration and pursuant to clause 8 of the AGREEMENT, SANLIAN
hereby irrevocably agrees, to provide indemnification for all the
obligations and liabilities of the either or all of VENDORS as a whole
under the AGREEMENT in favour of your company, and undertakes to, jointly
and severally with VENDORS, bear all relevant liabilities resulting from
any breach of the AGREEMENT by either or all of the VENDORS if either or
all of the VENDORS fail(s) to perform its/their obligations under the
AGREEMENT or the TRANSACTION DOCUMENTS. Such obligations of the VENDORS
include, without limitation, making indemnity for any Claim (as defined in
the AGREEMENT) made against either or all of the VENDORS by your company
pursuant to clauses 8 of the AGREEMENT.
This Letter of Indemnification is hereby issued.
INDEMNIFYING PARTY: SHANGDONG SANLIAN GROUP CO., LTD.
[Company Chop of Shangdong Sanlian Group Co., Ltd.]
SIGNED BY: /s/ Zhang Jikai
------------------------------
(Printed name)
(Stamp and Chop of SANLIAN)
DATE: April 20 2006
35
SCHEDULE J
MATERIAL CONTRACTS
[List of over a hundred contracts to which JGXC and EOPO are parties, which
include sales contracts, distribution and printing contracts, and agency
contracts.]
36
SCHEDULE K
LEASES
[Lease agreement between JGXC and Beijing Liangxiang Satellite City Real
Property Development Company regarding 18-C66, Construction Road, Kaixuan Main
Street, Beijing. Tenancy term is from February 1, 2006 to January 31, 2007 and
annual rent is RMB5,000.]
37
SCHEDULE L
INTELLECTUAL PROPERTY
(1) Domain name:
[Enlarge/Download Table]
Chinese domain name English domain name Universal website Internet name
------------------- -------------------- -------------------- --------------------
www.[Chinese Characters].cn www.eeo.com.cn [Chinese Characters] [Chinese Characters]
www.[Chinese Characters].com www.eobserver.com.cn (Economic Observer) (Economic Observer
www.[Chinese Characters].net Press Office)
www.[Chinese Characters].com
www.[Chinese Characters].net
www.[Chinese Characters].com
www.[Chinese Characters].com
www.[Chinese Characters].com
www.[Chinese Characters].com
(2) Trademarks:
[Download Table]
Date of processing
Trademark the application
Text/Graphic for registration Applicable category
------------ ------------------ -----------------------------------
The Economic Observer May 25, 2005 9 Science, navigation, land
[Chinese Characters] survey, electrical,
[Chinese Characters] photography, movies, optics,
scales, instruments of
measurement, signal, testing
(supervision), ambulance
(rescue) and instructional
instruments and devices,
recording, communications,
device for displaying sound
and image, magnetic data
medium, recording disc,
automatic vending machine and
coin-operated mechanical
structure, cash register,
computer and data processing
facility, fire extinguisher
The Economic Observer May 25, 2005 16 Different types of paper,
[Chinese Characters] paper board and products,
[Chinese Characters] printed matter, stapling
products, photos, stationery,
glues for stationery or home
use, fine arts products,
brush-pencil, typewriter and
office products (other than
furniture), education or
instructional products (other
than
38
[Download Table]
instruments), packaging
plastic materials (different
types), paper cards, printing
types, printing form
The Economic Observer May 25, 2005 35 Advertising, enterprise
[Chinese Characters] operation, enterprise
[Chinese Characters] management, office
administration
The Economic Observer May 25, 2005 40 Material processing
[Chinese Characters]
[Chinese Characters]
The Economic Observer May 25, 2005 41 Education, provision of
[Chinese Characters] training, entertainment, arts
[Chinese Characters] and sports activities
The Economic Observer May 25, 2005 42 Science and technology service
[Chinese Characters] and related research and
[Chinese Characters] design services; industrial
analysis and research,
computer hardware and software
design and development; legal
services
EEO.COM.CN May 25, 2005 9 Science, navigation, land
[Chinese Characters] survey, electrical,
photography, movies, optics,
scales, instruments of
measurement, signal, testing
(supervision),
ambulance (rescue) and
instructional instruments and
devices, recording,
communications, device for
displaying sound and image,
magnetic data medium,
recording disc, automatic
vending machine and
coin-operated mechanical
structure, cash register,
computer and data processing
facility, fire extinguisher
EEO.COM.CN May 25, 2005 16 Different types of paper,
[Chinese Characters] paper board and products,
printed matter, stapling
products, photos, stationery,
glues for stationery or home
use, fine arts products,
39
[Download Table]
brush-pencil, typewriter and
office products (other than
furniture), education or
instructional products (other
than instruments), packaging
plastic materials (different
types), paper cards, printing
types, printing form
EEO.COM.CN May 25, 2005 35 Advertising, enterprise
[Chinese Characters] operation, enterprise
management, office
administration
EEO.COM.CN May 25, 2005 40 Material processing
[Chinese Characters]
EEO.COM.CN May 25, 2005 41 Education, provision of
[Chinese Characters] training, entertainment, arts
and sports activities
EEO.COM.CN May 25, 2005 42 Science and technology service
[Chinese Characters] and related research and
design services; industrial
analysis and research,
computer hardware and software
design and development; legal
services
[Chinese Characters] July 6, 2005 16 Different types of paper,
CHINA BLUE paper board and products,
CHIP REAL ESTATE printed matter, stapling
And graphics products, photos, stationery,
glues for stationery or home
use, fine arts products,
brush-pencil, typewriter and
office products (other than
furniture), education or
instructional products (other
than instruments), packaging
plastic materials (different
types), paper cards, printing
types, printing form
[Chinese Characters] July 6, 2005 41 Education, provision of
CHINA BLUE training, entertainment, arts
CHIP REAL ESTATE and sports activities
And graphics
[Chinese Characters] July 6, 2005 16 Different types of paper,
The Economic Observer paper board and products,
Forum and graphics printed matter, stapling
products, photos, stationery,
glues for stationery or home
40
[Download Table]
use, fine arts products,
brush-pencil, typewriter and
office products (other than
furniture), education or
instructional products (other
than instruments), packaging
plastic materials (different
types), paper cards, printing
types, printing form
[Chinese Characters] April 28, 2005 41 Education, provision of
The Economic Observer July 6, 2005 training, entertainment, arts
Forum and graphics and sports activities
[Chinese Characters] June 3, 2006 16 Different types of paper,
The Most Respected (Note: date of paper board and products,
Companies of China application, not printed matter, stapling
And graphics date of products, photos, stationery,
processing) glues for stationery or home
use, fine arts products,
brush-pencil, typewriter and
office products (other than
furniture), education or
instructional products (other
than instruments), packaging
plastic materials (different
types), paper cards, printing
types, printing form
[Chinese Characters] June 3, 2006 41 Education, provision of
The Most Respected (Note: date of training, entertainment, arts
Companies of China application, not and sports activities
And graphics date of
processing)
[Chinese Characters] June 3, 2006 16 Different types of paper,
Marketing (Note: date of paper board and products,
And graphics application, not printed matter, stapling
date of products, photos, stationery,
processing) glues for stationery or home
use, fine arts products,
brush-pencil, typewriter and
office products (other than
furniture), education or
instructional products (other
than instruments), packaging
plastic materials (different
types), paper cards, printing
types, printing form
[Chinese Characters] June 3, 2006 41 Education, provision of
Marketing (Note: date of training, entertainment, arts
And graphics application, not and sports activities
date of
processing)
41
APPENDIX 1
[Equity Transfer Agreement in relation to JGXC - Please refer to Exhibit 10.30]
APPENDIX 2
[Articles of Association of JGXC]
APPENDIX 3
[Business Cooperation Agreement - Please refer to Exhibit 10.5]
APPENDIX 4
[Business Cooperation Contract - Please refer to Exhibit 10.24]
APPENDIX 5
[Information Consulting Committee Organization Agreement - Please refer to
Exhibit 10.23]
APPENDIX 6
[Articles of Association of Beijing Jingguan Jinghsi]
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘F-1’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 3/31/07 | | 7 |
| Filed on: | | 2/21/07 | | | | | | | F-6 |
| | 1/31/07 | | 39 |
| | 9/30/06 | | 7 | | 17 |
| | 4/1/06 | | 7 |
| | 2/1/06 | | 39 |
| | 12/31/05 | | 28 |
| | 7/6/05 | | 43 |
| List all Filings |
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Filing Submission 0001145549-07-000281 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
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