EXHIBIT 10.1
The Agreement ("Agreement") is entered into December 18, 2005 by the following
parties:
Party A: Xxxx Xxxx Feng and Xxxxx Xx Kun, (the shareholders of Beijing Xxxx
Xxxx Xxxxx Xx Film & TV Communication Co., Ltd. and Beijing Xxxx Xxxx Xxxxx Xx
Film Investment Consulting Co., Ltd.)
Address: Room 1708, Academy International Building Xx.0, Xxx Xxxx Xxxx,
Xxxxxxx Xxxxxxxx, Xxxxxxx, 000000, Xxxxx
Tel: 0000-00000000
Facsimile: 8610-82330886
Representative: Xxxx Xxxx Feng Nationality: Chinese
Party B: Navistar Communication Holding, LTD
Contact Address: 0000 X XXXXXXX XXXX, XXXXX 00-000 XXX XXXXX XX 00000
Tel: 0.000.000.0000
Facsimile: 212.310.1682
Representative: Xxx Xxx Nationality: U.S.A.
(1) Party A is the sole shareholder of Beijing Xxxx Xxxx Xxxxx Xx Film &
TV Communication Co., Ltd. and Beijing Xxxx Xxxx Xxxxx Xx Film
Investment Consulting Co., Ltd. (Referred to collectively as "Xxxx
Xxxx" hereafter), legally registered limited liability companies
established according to the laws of the People's Republic of China
("China") laws, who authorizes its representative Xxxx Xxxx Feng to
represent Xxxx Xxxx to sign this Agreement; Party B is a legally
registered limited liability company registered in U.S.A.
(2) In Accordance with The Company Law of China, The Contract Law of China
as well as other prevailing laws and regulations, Part B decides to
take operation control of and make investment in Xxxx Xxxx, and invest
in Xxxx Xxxx directly or indirectly through one of Party B's
subsidiaries.
1. Representations and Warranties
1.1. The representations and warranties jointly made by the both parties
are listed as follows:
(1) The both parties have all the relevant legal right and capacity and
are qualified for signing and implementation of this Agreement, and at
the same time, the signing and implementation of this Agreement will
not violate any or all the legal documents such as regulations on the
Company Regulation, Contract and Agreement which imposes certain
restrictions on it.
(2) The both parties have already carried out all the required actions or
will do so, to obtain the consent, approval, authorization and permit
required by signing and implementation of this Agreement.
(3) In keeping with the principles of reliability and creditability and
responsibility, both parties will make utmost efforts to work in close
cooperation to promote the smooth implementation of this Agreement.
The parties will follow the principles set forth within this
Agreement, and will not impede the implementation of this Agreement.
The representations and warranties of Party A
1.2 The representations and warranties that Party A makes to Party B are
listed as follows:
(1) All the materials having been or to be provided by Party A are
authentic, complete, accurate with no misleading information.
(2) The registered capital of Xxxx Xxxx has been fully contributed;
Xxxx Xxxx owns the legal ownership and use rights of the total
assets.
2
(3) Xxxx Xxxx has obtained necessary rights and permits,
authorizations, approvals and consent required for media content
production and business operation. The business scope of Xxxx
Xxxx does not go beyond the operational scope approved as well as
the rules of its articles.
(4) Its financials statements as audited by its auditing firm
according to the US GAAP are true and correct and fairly
represent the operation results of Xxxx Xxxx.
(5) Party A shall disclose all the mortgage of assets, sponsor and
related lawsuits and arbitration as well as administrative
penalties to which Party A is subject.
(6) Additional Representations and Warranties: There will be no
material change in the contributed assets and debt of Xxxx Xxxx
and Party A will maintain normal cash flow for the operational
activities;
1.3 The representations and warranties that Party B makes to Party A are
listed as follows:
(1) All the materials having been or to be provided to party A are
authentic, timely and complete.
(2) Party B recognizes all the contracts entered into before this
Agreement, and will cause the Joint Venture to duly fulfill the
implementation of this Agreement.
2. Operation Control and Investment
2.1 The scope of the capital assets of this cooperation refers to the total
assets appearing on the financials of Xxxx Xxxx.
2.2. As of the date of this Agreement, Party B shall assume the full
operation control of Party A, including without limitation all aspects of Xxxx
Xxxx'x business operation, production, distribution and sale of products and
shall have the complete power to appoint and change Xxxx Xxxx'x top management
staff and executives. Party B shall also nominate majority of Xxxx Xxxx'x board
members including its chairman.
3
2.3. Party B agrees to inject additional funding into Xxxx Xxxx either
directly or indirectly. After the completion of investment from Party B, Xxxx
Xxxx will become a subsidiary of Party B with Party B holds 70% of the total
equity and Party A holds 30% of the total equity of Xxxx Xxxx.
2.4 Standstill
Party A shall not enter into any discussion of capital contribution and
cooperation with any third party without the consent of Party B and shall avail
itself for the acquisition transaction as provided in Section 2.2 above.
3. Arrangement of the transaction
3.1. Party B shall make a total capital contribution of US$1,600,000 in
cash to Xxxx Xxxx in a format agreed to by the parties within the next 180 days.
3.2. Party B or its affiliated company shall make a payment of US$800,000
in cash to Mr. Xxxx Xxxx Feng no later than 180 days after the signing of this
Agreement.
3.3. A total of US$6,2 00,000 worth of shares are going to be issued to
Party A and their designees. The total shares are valued at US $6,200,000 at
$1.00 per share to be paid to Party A within 10 days upon the signing of this
Agreement.
4. Finance and taxation
The transaction price set does not include the undistributed profits of
Xxxx Xxxx before the ownership has transferred, which shall be owned by the
original shareholders of Xxxx Xxxx. The specific definition of the undistributed
profits of Xxxx Xxxx before the ownership has transferred is that the
undistributed profits of Xxxx Xxxx on the day party A and Party B sign the
Agreement and jointly recognized by the both parties plus the generated
reasonable profits during the period of the day the Agreement is singed to the
day the ownership has transferred to Party B.
5. Others
4
5.1. This Agreement is not allowed to be terminated on unilaterally.
5.2. If any of the parties breaches the Agreement, the non-breaching party
has rights to ask the other party for compensations due to breach of Agreement.
5.3. If any dispute arises between the two parties, the dispute shall be
negotiated and settled within 30 working days. If the negotiation fails, the two
parties can seek arbitration as the exclusive remedy and such arbitration award
shall be final, exclusive, binding and enforceable against the parties. The
arbitration shall be held in Hong Kong before the arbitral tribunal under the
auspices of the Hong Kong Chamber of Commerce using its procedural rules.
5.4. For issues fails to be mentioned in this Agreement, the two parties
may sign supplementary Agreement or attachment in writing, which forms effective
components of this Agreement with the same legal effect. 5.5. This Agreement is
in quadruplicate, with two copies held by each party. Party A: Authorized
representative:
Party B:
Authorized representative:
5
