English Translation of a Business License written in Chinese Sino-Foreign Cooperative Joint Venture Agreement For Yi Gao Shanghai Advertising Limited January 2009

 

7.8.All notices, resolutions and documents mentioned in this Agreement could be sent by fax. Directors may sign on a fax copy.

 

8.1.The joint venture company shall establish a management team which shall be responsible for its daily management. The management team shall have a general manager, appointed by Party B as the legal representative of the joint venture company. The general manager‘s terms of office is 1 year.

8.2.The responsibility of the general manager is to carry out the decisions of the board and organize and conduct the daily management of the joint venture company. The specific rights and responsibilities of general manager of the company described in the relevant provisions of this Agreement;

8.3 Supervisors

 

Company has no board of supervisors, only one supervisor who is appointed by the Party B.

 

Chairman, directors, general manager and financial officer shall not concurrently serve as supervisor. The supervisor’s term of office is 3 years. He or she may serve a consecutive term if re-elected upon expiration of the term.

 

Supervisor are responsible for the following matters:

 

(1) Monitor the company's financial status;

 

(2) Supervise the behavior of chairman, directors and general manager in performing their duties to ensure compliance with the laws and regulations; Request the chairman, the directors and the general manger to correct their behavior, if such behavior damages the interests of the company;

 

8.4 The joint venture company should set up a number of departments. Departmental managers are responsible for each department. Departmental managers should perform the work assigned by the general manager and report to the general manager regularly;

 

8.5 During the term, the board of directors shall assess if the general manager has achieved the goal of the board and evaluate his performance on annual basis.;

8.6 The remuneration of the expatriates and senior staff of the joint venture company will be determined by the board of director according to the remunerations offered by the other similar joint venture companies in China;

8.7 In case of any self-serving abuse, corruption, negligence, or incompletion of the task assigned, the board of directors or the general manager shall have the rights to dismiss or replace management at any time. Without approval from the board of directors, all employees of the joint venture company shall not serve simultaneously in other organizations.

9.1 The general manager of the joint venture company shall be responsible for preparing the annual business plan and budget. Each fiscal year operating plan and budget (including balance sheet, income statement and cash flow budget) shall be submitted to the board within one month before the start of the fiscal year.

10.1 All matters relating to foreign exchange shall be conducted in accordance with the "PRC Foreign Exchange Control Regulations” and other relevant provisions of China;

10.2 The joint venture company shall get the approval from the People's Bank of China or State Administration of Foreign Exchange Control to open RMB accounts and foreign currency accounts in the banks within the territory of the People’s Republic of China;

10.3 All the foreign exchange receipts of the joint venture company must be deposited in its foreign currency accounts and all foreign exchange disbursements must be made from its foreign currency accounts;

10.4 The joint venture company may apply for loans in foreign currency or RMB from banks based on its business needs and relevant regulation requirements.

11.1 Labor contract covering the recruitment, employment, dismissal and resignation, wages, labor insurance, welfare, rewards, penalties and other matters concerning the staff and workers of the joint venture company shall be established between the joint venture company and the individual employee of the joint venture company in accordance with the “People's Republic of China Labor law”, “Regulations of the People s Republic of China on Labor Management in Joint Ventures Using Chinese and Foreign Investment and its Implementing Rules in Shanghai” and other relevant regulations as well as the decisions of the board of directors. The labor contracts shall, after being signed, be filed with the local labor management department;

11.2 As for the staff the joint venture company needed, the company will give priority to the candidates recommended by Party A. The remains will be recruited through open recruitment and assessments by the joint venture company, after obtaining the approvals from the local labor management department.

11.3 As for the expatriates employed by the joint venture company, their wages are borne by the joint venture company. The recruitment, firing and wages, social insurance, welfare, standard of traveling expenses of the senior management staff recommended by both parties will be discussed and decided by the board of directors;

 

 

 

12.8 The financial statements shall be prepared on a monthly basis. The quarterly financial statements shall be submitted to the board of directors.

13.1 The duration of the joint venture company is 15 years. The establishment date of the joint venture company shall be the date on which the business license of the joint venture company is issued. An application for the extension of the duration shall be unanimously approved by the both parties and submitted to relevant authority for approval

14.1 When the following situations occur，the joint venture company can be terminated and liquidated:

 

14.1.1 Expiration of the duration of the joint venture company;

 

14.1.2 Serious losses of the joint venture company, resulting in less than the market value of its assets to pay debts due and payable, and in the reasonable future, unable to turn around;

 

14.1.3. Inability to make long-term execution of this Agreement due to force majeure, or suffering serious damage, which cannot be overcome;

 

14.1.4 All or most of assets shall be confiscated by the government or the relevant organizations.

 

14.1.5 Unless the parties otherwise agree, the joint venture company sell or transfer all or most of (more than 75%) of the assets.

 

14.1.6. In the event of default set in Chapter 14.2, the non-defaulting party has rights to request in writing to terminate this Agreement.

 

14.2 During the joint venture company operating period, in the event of default set as follows, the non-defaulting party has rights to request in writing to terminate this Agreement:

 

14.2.1. Any party is in violation of the provisions of this Agreement to transfer its whole or part of interests in the joint venture company;

 

14.2.2Any Party involving in a legal dispute with a third party may seriously impede the operations of the joint venture company. Under request of the joint venture company or the non-defaulting party in writing, the dispute is still not yet resolved within six months;

 

14.2.3 Any party fails to perform their major obligations under this Agreement, under request of the joint venture company or the non-defaulting party, such situation is not effectively cured or such default is failed to be compensated within 3 months;

 

14.2.4 Any party is dissolved and is declared bankruptcy.

 

 

14.3 If the joint venture company terminates due to the reasons as mentioned in Chapter 14.1, both parties shall perform asset valuation and liquidation under the instruction of the liquidation committee as established in accordance with “Liquidation rules for foreign invested enterprises”. The liquidation committee shall, by all means, obtain the best prices for the assets during the liquidation process. If necessary, the liquidation committee shall conduct public bidding, domestically and internationally to sell partial or entire assets. Each party is entitled to participate in the bidding process by its own or jointly with other third parties. After the settlement of the debts and the taxes, and upon verification of the liquidation reports by a CPA firm registered in China, the remaining assets shall be distributed to each party according to their proportion of their capital contribution at the time of the liquidation. Party B has the priority to the remaining foreign currency assets;

14.4 Party B has the rights to remit the assets obtained from liquidation to overseas according to the prevailing laws.

 

15.1 All kinds of insurance of the joint venture company shall be purchased from local insurance company in the People s Republic of China only. Types, value and duration of insurance shall be decided by the board of directors.

16.1 Should either Party A or Party B fail to pay the contributions on schedule, the breaching party shall pay to the other party 3% of such delayed contribution on a monthly basis. Should contribution was due for over 3 months, in addition to accumulated liquidated damages, the other party shall have the right to terminate this Agreement and to claim damages from the breaching party.

16.2 Should all or part of this Agreement and its appendices be unable to be executed as a result of one party’s fault, the breaching party shall be fully responsible for the loss. Should it be the fault of both parties, they shall take up their respective responsibility according to the actual situation.

17.1 The formation, validity , interpretation, execution and settlement of disputes in respect of this Agreement shall be governed by the relevant laws of the People’ s Republic of China. If no current law of the People’s Republic of China has been enacted to certain matter of this Agreement, the matter can be handled in accordance with general international practice.

18.1 Force majeure means:

 

(1)	out of control of the both parties or the joint venture company;

 

 

(2)	unforeseen events, and their occurrence and consequences are unpreventable and unavoidable; These events include (but are not limited to) floods, fire, explosion, typhoon, earthquake or other natural disasters, transport accidents, embargoes, riots, armed conflicts and wars;

 

18.4  If the force majeure event continues and this Agreement cannot be executed more than 6 months, both parties shall, through friendly consultations, as far as possible to immediately address how to further the execution of this Agreement.

19.1 The amendment of this Agreement or other appendices shall come into force only after a written agreement has been signed by both parties and approved by the original examination and approval authority.

20.1 If any disputes arisen during the contract terms of this Agreement, each party shall prepare a written notice which specifies the details of controversy to the counterparty. Both parties shall endeavor to resolve the dispute within 60 days after receiving the notices;

20.2 In case consensus cannot be reached within the aforementioned 60 days, the disputes shall be submitted to the Foreign Economic and Trade Arbitration Commission of the China Council for the Promotion of International Trade for arbitration in accordance with its rules of procedure. Their decision is final and with binding effect to both parties. The full cost of the arbitration shall be borne by the losing party;

20.3 During the arbitration, this Agreement shall be observed and enforced by both parties except for the matters in dispute.

 

21.1The appendices prepared in accordance with the principles of this Agreement are integral parts of this Agreement. This Agreement and its appendices shall come into force commencing from the date of approval of its entrusted examination and approval authority in the People s Republic of China.

21.2 Should notices be sent by either Party A or Party B by telegram or telex, etc., the written letter notices shall also be provided shortly. The legal addresses of Party A and Party B listed in this Agreement or new legal address which has been notified the counterparty, if any, shall be the posting addresses.

21.3 In accordance with 21.2, a notice sent by telegraph, telex or facsimile is assumed to arrive one business day later. "Working day" mentioned in 21.3 does not include Saturday, Sunday or statutory holiday;

21.4 Any provision in this Agreement of, such as the decision made by the arbitration body is not lawful, should not affect the legality of other provisions. Other provisions of this Agreement shall be enforced by both parties and the joint venture company

21.5 This Agreement shall be subject to the approval of Shanghai government and will be effective on the date of approval.

21.6 This Agreement is executed in four original copies, with the same effect signed by the authorized representative of both parties in Shanghai. Each party retains one copy. Two copies shall be sent to the project approval authority and the business registration authorities.

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Party A: Shanghai Quo Advertising Company Limited

Representative: Hao Da Yong

/s/ Hao Da Yong

 

Party B Linkrich Enterprise Advertising and Investment Limited

Representative: Godfrey Hui

/s/ Godfrey Hui

 

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