-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EgiIqvQCnS0LxFQiLE9xD/hfT7Guhd33nWLAWTLwoE6v8rtyiW3/G+/JCGI4jIOQ n5WEtfKmvgw7d1bNSmEBMw== 0001144204-07-013590.txt : 20070320 0001144204-07-013590.hdr.sgml : 20070320 20070320130101 ACCESSION NUMBER: 0001144204-07-013590 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20070123 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Changes in Control of Registrant ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070320 DATE AS OF CHANGE: 20070320 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALPHA NUTRA INC CENTRAL INDEX KEY: 0000837852 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-RETAIL STORES, NEC [5990] IRS NUMBER: 201777837 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19644 FILM NUMBER: 07705647 BUSINESS ADDRESS: STREET 1: 2038 CORTE DEL NOGAL STREET 2: SUITE 110 CITY: CARLSBAD STATE: CA ZIP: 92011 BUSINESS PHONE: 760-804-8844 MAIL ADDRESS: STREET 1: 2038 CORTE DEL NOGAL STREET 2: SUITE 110 CITY: CARLSBAD STATE: CA ZIP: 92011 FORMER COMPANY: FORMER CONFORMED NAME: ALPHA NUTRACEUTICALS INC DATE OF NAME CHANGE: 20040115 FORMER COMPANY: FORMER CONFORMED NAME: SIERRA ROCKIES CORP DATE OF NAME CHANGE: 19970604 FORMER COMPANY: FORMER CONFORMED NAME: GALLERY RODEO INTERNATIONAL DATE OF NAME CHANGE: 19941118 8-K 1 v068824_8k.htm Unassociated Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 23, 2007
 
ALPHA NUTRA, INC.
(Exact name of registrant as specified in its charter)
 
Nevada
(State or other jurisdiction of incorporation)
000-19644
(Commission File Number)
20-1778374
(IRS Employer Identification No.)
 
 
 
1900 Ninth Street, 3rd Floor Boulder, Colorado 80302
Telephone No.: (303) 449-7733
(Address and telephone number of Registrant's principal
executive offices and principal place of business)
 
2038 Corte Del Nogal, Suite 110 Carlsbad, California 92011
(Former address, if changed since last report.)
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

ྎ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

ྎ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

ྎ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

ྎ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

 
Forward Looking Statements
 
This Current Report Form 8-K and other reports filed by Alpha Nutra, Inc., doing business as China Broadband (the “Company” or “Alpha Nutra”), a Nevada corporation from time to time with the Securities and Exchange Commission (collectively the “Filings”) contain or may contain forward looking statements and information that are based upon beliefs of, and information currently available to, the management of the Company as well as estimates and assumptions made by its management. When used in the filings the words “may”, “will”, “should”, “estimates”,  “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan” or the negative of these terms and similar expressions as they relate to the Company or its management, identify forward looking statements. Such statements reflect the current view of the Company and with respect to future events and are subject to risks, uncertainties, assumptions and other factors relating to the Company. Such forward-looking statements include statements regarding, among other things:
 
 
·
our ability to complete our acquisition and satisfy our obligations under our agreements with respect to our acquisition of the cable broadband business of Jian Guangdian Jiahe Digital Television Co., Ltd. located in mainland People’s Republic of China (“China”),
 
·
our ability to raise an additional 20 Million Renminbi (approximately $2,600,000 based on current exchange rates) in order to make the second payment of our purchase price for the business, which must be paid within nine months of the closing of the acquisition described in this report,
 
·
a complex and changing regulatory environment in China that currently permits only partial foreign ownership of Chinese businesses and thatch th Chinese and United States accounting rules, ed Chinese business, \rmit us to consolidate requires us to negotiate, acquire and maintain separate government licenses to operate each internet business that we would like to acquire (or any other business we would like to acquire in China),
 
·
our ability to implement complex operating and revenue sharing arrangements that will enable us to consolidate our financial statements with our prospective partially owned Chinese business, and to modify and adapt these business arrangements from time to time to satisfy United States accounting rules,
 
·
our ability to enter into agreements with and to consummate acquisitions of other broadband businesses in China in the Shandong region and elsewhere,
 
·
socio-economic changes in the regions in China that we intend to operate in that affect consumer internet subscriptions,
 
·
the ability of the Chinese government to terminate or elect to not renew any of our licenses for various reasons or to nationalize our industry, without refund,
 
·
our anticipated needs for working capital.

Although the Company believes that the expectations reflected in the forward looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, Registrant does not intend to update any of the forward-looking statements to conform these statements to actual results. The following discussion should be read in conjunction with the Company’s pro forma financial statements and the related notes that will be filed herein.
 

 
Table of Contents

Item No.
Item Heading
Page No.
1.01
Entry into a Material Definitive Agreement
2
2.01
Completion of Acquisition or Disposition of Assets
6
2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
10
3.02
Unregistered Sales of Equity Securities
11
5.01
Changes in Control of Registrant
12
5.02
Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
Management
Principal Stockholders
12
13
17
9.01
Exhibits
20



Item 1.01 Entry into a Material Definitive Agreement and Amendment of Material Definitive Agreement
 
See “Share Exchange Agreement With China Broadband Ltd.” below and Items 2.01, 3.02, 5.01 and 5.02 below, which are incorporated herein by reference.

All references in this Form 8-K to the “Company,” “we,” “our,” or “us,” ” refer Alpha Nutra, Inc. d/b/a China Broadband, and its operating subsidiaries as constituted subsequent to the closing of the Share Exchange Agreement with China Broadband Ltd., a Cayman Islands company, except where the context makes clear that the reference is only to China Broadband Ltd. Information about the Company and the principal terms of the Share Exchange (as defined below) are set forth below.

Share Exchange Agreement With China Broadband Ltd.

On January 23, 2007 (the “Closing Date”) and pursuant to a Share Exchange Agreement dated as of January 23, 2007 (the “Exchange Agreement”), between us, China Broadband Ltd, a Cayman Islands company (“China Broadband Cayman”) and its four shareholders (the “Broadband Shareholders”), we acquired 100% of the outstanding capital stock (the “Broadband Shares”) of China Broadband Cayman from it’s four shareholders in exchange for 100% of the outstanding shares of China Broadband Cayman, resulting in China Broadband Cayman becoming a our wholly owned subsidiary (said transaction being referred to herein as the “Share Exchange.”).
 
In exchange therefore and pursuant to the terms of the Exchange Agreement, we issued 37,865,506 shares (the “Exchange Shares”) of Common Stock, par value $.001 per share (the “Common Stock”) and assumed obligations of China Broadband Cayman under $325,000 principal amount of 7% Convertible Promissory Notes (the “Convertible Notes”), which become convertible into 1,300,000 shares of common stock and other related obligations. All of the holders of these Convertible Notes have requested conversion into our Common Stock in March of 2007.

Effective as of the Closing Date of the Share Exchange on January 23, 2007, new members of management were appointed to the Board and as executive officers, and our existing officers and directors, Mark L. Baum and James B. Panther, II, have resigned from all officer and director positions with the Company.

We have not acquired any material assets as a result of the Share Exchange and have not commenced operations as of the date of this report. Nonetheless, as a result of the Share Exchange, we assumed or entered into, various material agreements described in the subsection of Item 1.01 below titled “Agreements Assumed or Entered Into in Connection with Share Exchange and November 2006 Offering” and in Item 2.01 below.
 
Accounting Treatment

As a result of this transaction there is a change of control of and we are deemed to be the legal surviving acquirer in the Share Exchange and therefore, the assets and liabilities and historical operations of China Broadband Cayman, its subsidiary based and organized in the People’s Republic of China called Beijing Zhong Kuan Hua Shi Network Information Technology Co., Ltd. (the “WFOE”) will be reflected in our financial statements.

Simultaneous Closing of $3,282,500 Equity Financing 

Simultaneously with the Closing of the Share Exchange, and as a necessary condition thereto in order to fund our acquisition of the broadband business in China, Alpha Nutra conducted the first closing of our private offering (the “November 2006 Offering”), pursuant to which we entered into subscription agreements with investors with respect to issuance of 6,000,000 shares of Common Stock (the “Offering Shares”) and 3,000,000 Redeemable Common Stock Purchase Warrants, exercisable at $2.00 per share (the “Warrants”). The aggregate gross proceeds of the November 2006 Offering was $3,282,500, with 6,565,000 Offering Shares and 3,282,500 Warrants subscribed for by an aggregate of 34 accredited investors. Pursuant to the Exchange Agreement and the terms of the November 2006 Offering, we will use $2,570,679 of the proceeds of the November 2006 Offering to pay the first installment of our acquisition of a 51% interest in the China based broadband cable internet business spun off by Jian Guangdian Jiahe Digital Television Co., Ltd. This business acquisition, if completed, will be our only initial operating business after the Share Exchange. Additional information relating to this offering and related agreements is set forth in the subsection titled “Agreements Assumed or Entered Into In Connection with Share Exchange and November 2006 Offering” in this Item 1.01 below, and in the section titled “Item 3.02 Unregistered Sales of Equity Securities” below.
 
2

 
Incorporation By Reference
 
Specific information relating to the Share Exchange and the November 2006 Offering, and related contract obligations entered into or assumed thereby is set forth in this Item 1.01 and in Items 2.01 and 3.02 below and information relating to the resulting change of control of the Company is disclosed in Item 5.01 and 5.02 below, the provisions of which are incorporated by reference herein.

Material Agreements Assumed or Entered Into; Prospective Acquisition of Operating Business
 
Share Exchange Agreement
 
Our subsidiary after the Closing Date of the Share Exchange, China Broadband Cayman, has, through its WFOE subsidiary based in mainland China, entered into a Cooperation Agreement (the “Cooperation Agreement”) with Jian Guangdian Jiahe Digital Television Co., Ltd (“Jinan Parent”) on December 26, 2006, pursuant to which, among other things, it has agreed to acquire a 51% interests of Jia He Broadband Ltd. (“Jinan Broadband”), a “joint venture” company formed for the purposes of holding the broadband cable internet business of Jinan Parent. The Cooperation Agreement relating to the terms of the acquisition of Jinan Broadband. At the closing of this transaction, the parties are also required to enter into a Exclusive Service Agreement relating to the shared management and revenue rights of the Company and Jinan Parent, which will own the other 49% of Jinan Broadband.
 
The material terms of the Exchange Agreement and related agreements with China Broadband Cayman:

 
 
·
We have acquired all of the shares of China Broadband Cayman from the four Broadband Shareholders in exchange for 37,865,506, shares of our Exchange Shares, resulting in China Broadband Cayman becoming our wholly owned subsidiary and its former Broadband Shareholders owning over 78% of our Common Stock after the Closing Date in addition to 2,000,000 shares to be issued and held in escrow which are to be cancelled upon issuance of shares in connection with any equity offerings consummated within two years of the Closing Date (including shares sold in the November 2006 Offering, to the extent that we sold greater then 6,000,000 shares in such offerings),
 
 
·
We have funded in escrow, the first of two payments of the acquisition of the 51% interest in Jinan Broadband of $2,570,679 required to be paid under the Cooperation Agreement, from the proceeds of the November 2006 Offering (see “Acquisition by our WFOE of 51% interest in Jinan Broadband” below),
 
 
·
We have assumed liabilities of China Broadband Cayman under the $325,000 principal amount of Convertible Notes, which were exercisable at $.25 per share of our Common Stock for an aggregate of 1,300,000 shares and to pay interest thereon (the “Conversion Shares”),
 
 
·
We have agreed to assume certain obligations of China Broadband Cayman to issue, and have so issued, 48,000 shares to a placement agent of China Broadband Cayman in connection placement agent services rendered by it in connection with the sale of Convertible Notes (the “WestPark Shares”),
 
-3-

 
 
·
We have agreed to register the Exchange Shares pursuant to a Registration Rights Agreement, and to assume obligations of China Broadband Cayman under its registration rights agreement, to register all Conversion Shares and the WestPark Shares,
 
 
·
We have issued 500,000 warrants (the “BCGU Warrants”) to BCGU, LLC, an entity beneficially owned by Mark L. Baum, our outgoing director, executive officer and principal shareholder, as consideration for professional and related services rendered, which warrants are exercisable at $.60 and expire on March 24, 2009,
 
 
·
We have agreed to a lockup agreement and anti dilution agreement with respect to the Exchange Shares and with respect to shares held by Mr. Baum, our outgoing executive officer and director and the former shareholders and principals of China Broadband Cayman (see “Lock-Up Agreements” below),
 
 
·
We have issued 3,974,800 warrants to Maxim Financial Corporation as a consulting fee and in exchange for funding operating and other business activities of China Broadband Cayman prior to the Share Exchange and in exchange for entering into a pass through lease with us, and for waiving past and future rent through December 2007 under such lease. (see “Certain Relationships and Related Transactions”).

Agreements Assumed or Entered Into In Connection with Share Exchange and November 2006 Offering

In connection with our acquisition of China Broadband Cayman, and in addition to the Exchange Agreement described above, we have assumed or entered into, the following material agreements.

·
 
Convertible Notes. Pursuant to the Exchange Agreement, we have assumed China Broadband Cayman’s obligations under the Convertible Notes held by 11 investors, in the aggregate principal amount of $325,000 on September 22, 2006, in connection with a bridge financing of China Broadband Cayman (the “Broadband Note Financing”). The Broadband Note Financing was made in contemplation of a prospective business combination and acquisition of the Chinese based broadband cable internet business. The Convertible Notes, by their terms, provide that China Broadband Cayman shall require that any acquiring parent company of China Broadband Cayman, agree to assume the obligations of the Convertible Notes in the event of a business combination and are convertible into such number of shares as equals 2.6% of the acquiring parent company (or approximately $.25 per share), or 1,300,000 shares presuming that 50,000,000 shares of our common stock are outstanding at the time of conversion, including the shares issuable upon conversion. Our assumption of these notes includes our assumptions under the Note Purchase Agreement and Registration Rights Agreement (the “Broadband Registration Rights Agreement”) entered into with these investors in connection with the Broadband Note Financing and pursuant to which we have agreed, among other things, to file a registration statement within 3 months of a business combination, with respect to the sale of the Conversion Shares. Interest through the date of repayment (or conversion, as the case may be) is payable to these note holders in cash. We have recently received notice of conversion of these Convertible Notes into 1,300,000 shares of Common Stock and are paying all interest in cash. (See “Broadband Registration Rights Agreement,” below).
     
·
 
2006 WestPark Shares. Pursuant to the Exchange Agreement, we have also agreed to assume the obligations of China Broadband Cayman with respect to issuance of obligations to purchase 48,000 shares of Common Stock to WestPark Capital, Inc. as part of the consideration paid to them as a placement agent in connection with the sale of the Convertible Notes (i.e the WestPark Shares) in the Broadband Note Financing. We are required to register the shares issuable upon exercise of the WestPark Shares pursuant to the Broadband Registration Rights Agreement. (See “Broadband Registration Rights Agreement,” below).
 
-4-

 
·
 
Broadband Registration Rights Agreement. We have also agreed to assume China Broadband Cayman’s obligations under the Broadband Registration Rights Agreement entered into in connection with the issuance of Convertible Notes on September 22, 2006. The Broadband Registration Rights Agreement requires, among other terms, that we register all Conversion Shares within three months after the Closing Date and that if such registration statement is not declared effective by the SEC on or prior to the four month anniversary of the Closing Date, we are required to issue, on the last day of each succeeding month thereafter until a registration statement is effective, to each investor therein such number of shares of Common Stock as equals 2.5% (the “Bonus Shares”) of the shares (and “Bonus Shares”) held by or issuable to such person under the Convertible Notes or 2006 Bridge Warrants. This agreement also allows the majority of holders of shares that are registrable under this agreement to select counsel in the event of an underwritten offering. We do not believe that we will be able to timely obtain effectiveness of a registration statement of these securities at this time.
     
·
 
Employment Agreement with Jiang Bing. We have entered into an employment agreement with Jiang Bing, our Vice Chairman and Director, who will hold similar executive positions of our operating subsidiaries. Pursuant to this employment agreement, Mr. Bing will receive compensation of $120,000 per annum, plus a bonus and other medical and similar benefits. This term of this employment agreement terminates on July 7, 2009. The Company and Mr. Bing have agreed to defer all cash compensation until the closing of any qualifying offering with gross proceeds of $5,000,000 or greater.
     
·
 
Employment Agreement with Clive Ng. We have entered into an employment agreement with Mr. Ng, our President and Chairman of the Board of Directors, who will hold similar executive positions of our operating subsidiaries. Pursuant to this employment agreement, Mr. Ng will receive compensation of $250,000 per annum, plus a bonus and other medical and similar benefits. This term of this employment agreement terminates on July 7, 2009. The Company and Mr. Ng have agreed to defer all cash compensation until the closing of any qualifying offering with gross proceeds of $5,000,000 or greater.
     
·
 
Employment Agreement with Yue Pu. We have entered into an employment agreement with Mr. Pu, our Chief Executive Officer and Director, who will hold similar executive positions of our operating subsidiaries. Pursuant to this employment agreement, Mr. Pu will receive compensation of $120,000 per annum, plus a bonus and other medical and similar benefits. This term of this employment agreement terminates on July 7, 2009. The Company and Mr. Pu have agreed to defer all cash compensation until the closing of any qualifying offering with gross proceeds of $5,000,000 or greater.
     
·
 
Lock-Up Agreement with BCGU. Pursuant to the terms of the Exchange Agreement, we entered into a Lock-Up Agreement with BCGU and Mark L. Baum, our former sole director and executive officer and the former Broadband Shareholders, pursuant to which only up to 5% of each such shareholders shares may be sold each month, on a cumulative basis. The provisions of this agreement may be waived by the Company only if it determines in good faith that the trading of the Company’s common stock will not be adversely affected and if such waiver is made pro rata among all persons subject to the Lock Up Agreement.
     
·
 
November 2006 Offering Registration Rights Agreement and Subscription Agreements. We have also entered into a Registration Rights Agreement with the Broadband Shareholders, BCGU, Westpark, as placement agent and the November 2006 Offering investors with respect to all Common Stock issued or issuable to such persons upon exercise of warrants. We have also entered into subscription agreements with the investors in this offering. This Registration Rights Agreement is similar to the Broadband Registration Rights Agreement entered into in connection with the Broadband Note Financing on September 22, 2006, except that the company agreed that it will not file a registration statement with respect to such shares until at least 91 days after the Closing Date.
 
-5-

 
·
 
Westpark Warrants. We have issued 525,000 warrants to purchase common stock to WestPark Capital Inc. as part of the consideration for acting as placement agent in the November 2006 Offering (the “WestPark Warrants”). The WestPark Warrants are exercisable at $.60 per share and expire on March 24, 2009.
     
·
 
Consulting Agreement and Lease of Office Space in Boulder Colorado. We have entered into a year to year lease to rent office space and facilities in Boulder Colorado from Maxim Financial Corporation. This lease covers 1,000 square feet of office space and related services, which we primarily use as our United States corporate offices. The monthly lease rate is $2,000 per month. This lease may be terminated for any reason by Maxim Financial Corporation on 30 days notice. Pursuant to our consulting agreement with it, Maxim Financial Corporation has waived its past fees since July of 2006 and all future rental fees through December 31, 2007. (See also Share Exchange in Item 1.01 above and “Certain Relationships and Related Transactions” in Items 5.02 and 5.03 below).
 
Item 2.01 Completion of Acquisition or Disposition of Assets
 
As of the date of this report we are still a shell company with minimal or no operations. Accordingly, information relating to the description of our business and Management Discussion and Analysis and related financial information as filed in our Annual Report on Form 10-KSB for the year ended December 31, 2005 and the Quarterly Reports on Form 10-QSB for the quarters ended March, June and September of 2006 (collectively the “Company Reports”) are incorporated by reference herein.
 
Additionally, and without limitation, information required by Items 401, 402, 403, 404 and 407(a( of Regulation SB as required to be provided herein as in effect prior to the Share Exchange are incorporated by reference herein from such Company Reports and all such information reflecting the company and its management after the Share Exchange are provided in Items 5.01 and 5.02 below and incorporated by reference herein.

The below information relates to our prospective business.
 
Acquisition by our WFOE of 51% interest in Jinan Broadband
 
We have paid $2,570,679 of our net proceeds from the November 2006 Offering into escrow in China for payment to Jinan Parent in exchange for ownership by the China based WFOE of 51% interest in Jinan Broadband and entry into the Exclusive Corporation Agreement. We expect the first part of this Acquisition to be completed in late March of 2007 (the “Acquisition”). The general business terms of this Acquisition are, in relevant part, as follows:
 
 
·
Because regulations in China prohibit direct complete domestic ownership of China based businesses, China Broadband Cayman has formed our WFOE as a wholly foreign owned entity that has entered into the Cooperation Agreement for the purchase of a 51% interest in Jinan Broadband.
     
 
·
We expect to receive a business license from the local Industry and Commerce Bureau that, will enable us to complete the Acquisition and operate the business of Jinan Broadband, at the end of March 2007,
 
 
·
Our WFOE will, at the Closing of the Acquisition, own the 51% interest in Jinan Broadband with the seller of this business, Jinan Parent, owning the remaining 49% and maintaining certain control under the Cooperation Agreement,
 
 
·
Within nine months of Closing of the Acquisition, the remaining $2,600,000 (as may be adjusted to reflect currency exchange rates for 20,000,000 RMB at the time of making such payment) of the purchase price (or whatever portion of the purchase price remains unpaid), must be paid
 
-6-

 
 
·
Jinan Parent, Jinan Broadband and Jinan Radio and Television Networks Center, shall enter into the Cooperation Agreement providing for the management terms and rights and revenue sharing rights between us and Jinan Parent. (See “Description of Cooperation Agreement” section, below).
 
No assurance can be made that we will be able to comply with the second large payment to be made as part of the consideration for the acquisition of Jinan Broadband. Additionally, no assurance can be made that we will obtain our business license of be able to comply with the terms of the Exclusive Service Agreement or Cooperation Agreement.
 
We do not anticipate that revenues from operations will be sufficient to cover this cost. Therefore, we will be dependent on obtaining additional financing or suitable extensions in order to complete this acquisition.


Description of Business
 
Prior to the completion of our Acquisition of Jinan Broadband, we are still a blank check company without material operations. The following is a brief description of the business to be acquired and other information relating to the Company.
 
About Jinan Parent and Jinan Broadband
 
Jinan Parent, the entity that will be selling its cable broadband business to us, is an emerging cable consolidator and operator in China’s cable broadband market. According to annual research report issued by CNNIC on July 2006, Jinan Parent is one of China’s top five cable broadband service providers among China’s over 1,000 municipal or county cable TV network operators. Jinan Broadband will, at the closing our acquisition of this business, be a subsidiary of Jinan Parent, which will be owned 51% by us and 49% by Jinan Parent and will be operated in accordance with the Cooperation Agreement and one or more operating agreements. Jinan Broadband operates out of its base in Shandong where it has an exclusive cable broadband deployment partnership with Jinan Radio & Television Network, the only cable TV operator in Jinan, the capital city of Shandong.
 
Initial Focus on Shandong Region
 
Jinan is the capital city of Shandong Province. With population of 5.9 million, Jinan cable serves 1.3 million cable TV households. Jinan scored GDP of 160 billion RMB Yuan in year 2005. Jinan cable has 40,000 cable broadband users. (All population and GDP statistics in this section are provided by Jinan Municipal Government and can be viewed without charge as (www.jinan.gov.cn).
 
We hope that our initial contract will allow us to fully exploit the cable markets in the Shandong region with our flagship subsidiary, Jinan Broadband. With 92 million in population, Shandong is No. 2 in China’s 2005 provincial Gross Domestic Product ranking (based on information from the China Statistics Bureau), of which 43.5% lives in urban area where cable TV network has a higher penetration rate. Based on information from Shandong Branch of SARFT (State Administration of Radio Film & Television), Shandong has a consolidated cable TV customer base of 10 million households served by 17 municipal cable TV operators. Jinan Radio & Television Network reaches 1.3 million cable TV households among the total 10 million.
 
We believe that the Shandong regional market provides great market potential for rolling out our core cable broadband services. We intend to develop and evolve our market strategy on an ongoing basis based on our results in the Shandong region.

-7-

 
China Broadband, Inc.
 
The following chart depicts our corporate structure after the closing of the offering and Acquisition
 
Description of Property
 
Effective immediately after the Share Exchange, and as a result of our acquisition of China Broadband Cayman, our principal executive offices in the United States located at 1900 Ninth Street, 3rd Floor Boulder, Colorado 80302, under a lease with Maxim Financial Corporation. This lease is for 1,000 of office space and shared administrative services. This lease is an at cost lease with all lease payments waived by Maxim Financial Corporation through December of 2007 pursuant to the consulting agreement with them

LEGAL PROCEEDINGS

Neither Alpha Nutra, Inc., China Broadband, nor any of its controlled affiliates, are a parties to any litigation.
 
 
-8-

 
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
The Alpha Nutra Common Stock is quoted on the Pink Sheets, under the symbol, "APNA.PK". Trading in the common stock in the over-the-counter market has been limited and sporadic and the quotations set forth below are not necessarily indicative of actual market conditions. Further, these prices reflect inter-dealer prices without retail mark-up, mark-down, or commission, and may not necessarily reflect actual transactions.
 
Fiscal Years:
 
 
 
 
 
2006
 
High
 
Low
 
December 31, 2006
 
$
2.75
 
$
1.50
 
September 30, 2006
 
$
4.00
 
$
5.00
 
June 30, 2006
 
$
4.00
 
$
5.00
 
March 31, 2006
 
$
4.00
 
$
5.00
 
2005
         
December 31, 2005
 
$
0.10
 
$
0.10
 
September 30, 2005
 
$
0.10
 
$
0.10
 
June 30, 2005
 
$
0.25
 
$
0.25
 
March 31, 2005
 
$
0.50
 
$
0.25
 
2004
         
December 31, 2004
 
$
0.50
 
$
0.25
 
September 30, 2004
 
$
0.25
 
$
0.25
 
June 30, 2004
 
$
0.75
 
$
0.25
 
March 31, 2004
 
$
1.10
 
$
0.50
 
               

As of March 20, 2007 there were 294 record holders of our Common Stock. We have not declared or paid dividends to our stockholders during this or our two most recently completed fiscal years. We do not anticipate that we will pay dividends any time in the near future and anticipate reinvesting revenues, if any, in the operations of the Company.
 
RECENT SALES OF UNREGISTERED SECURITIES

See Item 1.01, Item 2.01 and Item 3.02, the provisions of which are incorporated herein by reference.

DESCRIPTION OF SECURITIES
 
Our Articles of Organization provide for an authorized capital of 100,000,000 shares, of which 95,000,000 are common stock, $.001 par value and 5,000,000 shares are blank check preferred stock. As of immediately prior to the Closing of the Share Exchange on January 23, 2007, we had approximately 2,534,494 shares of our common stock issued and outstanding with 37,865,506 (plus two million escrow shares) issued in the Share Exchange, and an additional 6,565,000 shares issued to 34 investors in the November 2006 Offering for a total of 50,000,000 shares issued and outstanding immediately after the Closing of the Share Exchange (after taking effect of return of certain escrow shares). We have no shares of preferred stock issued or reserved for issuance, and our board of directors has never designated the rights, preferences or privileges of an preferred stock.
 
In addition to the foregoing, we have issued warrants and Convertible Notes, the descriptions of which are set forth in Item 1.01, 2.01 and 3.02 herein which are incorporated by reference herein.
Common Stock
 
The following statement is a brief summary of certain provisions relating to our common stock:
 
Dividends. The holders of common stock are entitled to receive, ratably, dividends when, as and if declared by the Board of Directors out of funds legally available therefore.
 
Liquidation Preference. In the event of our liquidation, dissolution or winding up, the holders of common stock are entitled, subject to the rights of holders of our preferred stock, if any, to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock.
 
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Conversion. The holders of common stock have no conversion rights and they are not subject to further calls or assessments by us.
 
Preemption. The holders of common stock have no preemptive rights and they are not subject to further calls or assessments by us.
 
Voting Rights. The holders of common stock are entitled to one vote for each share held of record on all matters on which the holders of common stock are entitled to vote.
 
Preferred Stock
   The board may issue from time to time, one or more classes of preferred stock, in one or more series, each with liquidation preferences, voting rights, anti-dilution protections, pre-emptive rights or other rights, benefits or privileges that are superior, equal or inferior to the rights, preferences and privileges of the holders of common stock and, that could have the effect of preventing or delaying a change of control, or that would dilute the benefits and rights given to common stock holders in the event of a change of control or in the event of a liquidation. In addition, preferred stock holders may be given rights to veto or approve certain matters without consent of other stockholders or to appoint one or more directors and to approve or disapprove of certain contracts. Currently, the Board has not designated any shares or series of preferred stock and has no present intentions to designate or issue such shares.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the Registrant

As of February 28, 2007, we do not have any off balance sheet arrangements, as defined in Section 303(c) of Regulation S-B. Off balance sheet arrangements include, without limitation, contractual arrangements with any entity whose financial information is not consolidated with our own, under which we have:

 
·
Guaranteed any obligation of such other entity;
 
·
A retained or contingent interest in assets transferred to such unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets;
 
·
Any obligation under certain derivative instruments;
 
·
Any obligation under a material variable interest held by the registrant in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the registrant, or engages in leasing, hedging or research and development services with the registrant.

Additionally, we do not have any relationships or transactions with persons or entities that derive benefits from any non-independent relationships other than related party transactions discussed herein.

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Item 3.02 Unregistered Sales of Equity Securities

Issuances of Shares Under Share Exchange

As part of the consideration for the Broadband Shares, and as more fully describe under Item 2.01 of this Form 8-K, Alpha Nutra issued to the four Broadband Shareholders 37,865,506 shares of common stock which were not registered. The share issuances were made pro-rata to each Broadband Shareholder based on such shareholders’ ownership of China Broadband Cayman shares prior to the Share Exchange. The share issuances and consideration paid, were as follows:

 
Name
No. of Shares Issued
 
88 Holdings, Inc.
3,582,753
 
Stephen P. Cherner
1,900,000
 
MVR Investments, LLC
1,382,753
 
China Broadband Partners, Ltd
31,000,000
 
Total
37,865,506

88 Holdings, Inc. and China Broadband Partners, Ltd. (“Partners”)are both owned and controlled by Clive Ng who has been appointed as a director and as an executive officer at closing of the Share Exchange.
 
In addition, 2,000,000 shares of our Common Stock were to be issued to the Broadband Shareholders, pro - rata in escrow, the provisions of which provide that such shares are to be returned for cancellation to the extent that greater then 6,000,000 shares are issued in any private placement of equity or convertible debt securities during the 24 month period after the offering. As a result of the issuance of greater then 6,000,000 Offering Shares in the November 2006 Offering, the number of escrow shares has been reduced by 565,000 shares to 1,435,000 shares in escrow. Shares in escrow are subject to a voting proxy pursuant to which Clive Ng shall vote all such shares in accordance with all other votes cast at a meeting of shareholders or by written consent in lieu of meeting.
 
We have also issued 3,974,800 warrants, exercisable at $.60 per share, which expire on March 24, 2009, to Maxim Financial Corporation in connection with our sub lease of space from them and our consulting agreement with them (See Item 5.02 below, the provisions of which are incorporated herein).

Finally, as a result of the Share Exchange, we assumed China Broadband’s obligations to issue 1,300,000 restricted Conversion Shares to the noteholders thereon and to issue 48,000 shares to Westpark Capital, Inc. for acting as placement agent thereon. All noteholders have requested conversion of their Convertible Notes.

The issuance of the common stock and (including the common stock held in escrow) in the Share Exchange was exempt from registration under the Securities Act pursuant to Section 4(2) in that it did not involve a public offering of securities.

Issuances of Shares Pursuant to November 2006 Offering
 
Pursuant to the November 2006 Offering, Alpha Nutra offered, on a private basis and to a limited number of accredited investors only, up to 160 units (the “Units”) at a purchase price of $25,000 per Unit, each Unit consisting of 50,000 Offering Shares and 25,000 warrants, pursuant to which an aggregate of up to 8,000,000 Offering Shares and 4,000,000 Warrants may be sold. The Units were offered and sold through WestPark Capital, Inc. as placement agent on a “best efforts, $3,000,000 or 120 Unit (or 6,000,000 shares and 3,000,000 Warrants) minimum and a $4,000,000 or 160 Unit maximum (or 8,000,000 Shares and 4,000,000 Warrants)” basis. The terms of the offering provided that the first closing could only occur if the minimum offering amount had been met and subscribed for in escrow and the Share Exchange was entered into and to be consummated simultaneously with the November 2006 Offering. In addition, the offering terms required that a substantial portion of the proceeds would be allocated towards the acquisition of Jinan Broadband by our WFOE subsidiary after the Acquisition.
 
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The first closing of the November 2006 Offering, with $3,000,000 gross proceeds, occurred simultaneously with the closing of the Share Exchange on January 23, 2007. $2,570,679 of proceeds from our November 2006 Offering were wired into escrow in China for use in connection with the escrow of the first payment under the Cooperation Agreement described above. We sold an additional 565,000 shares and 282,500 Warrants in subsequent closings resulting in aggregate gross proceeds of $3,282,500 in this offering, and an aggregate of 6,565,000 shares and 3,282,500 Warrants issued in this offering to 34 accredited investors. We paid $262,600 in cash and issued 525,200 WestPark Warrants exercisable at $.60 per share to Westpark Capital, Inc. as a placement agent fee for the offering. The issuance of the stock and Warrants in the November 2006 Offering was exempt from registration under the Securities Act pursuant to Section 4(2) and Rule 506 of Regulation D of the Securities Act, as amended, in that it did not involve a public offering of securities and securities were only offered and sold to a limited number of Accredited Investors only, as such term is defined in Rule 501 of Regulation D.
 
Lock Up Agreements 

All Offering Shares are subject to a lock - up provision pursuant to which shareholders may only sell up to 10% of such shareholders initial share ownership after the November 2006 Offering during any 30 day period on a cumulative basis, provided that no greater then 20% may be sold by such shareholder during any single 30 day period. Investors in this offering who have invested greater than $250,000 may sell up to 15% of their initial number of shares each month, on a cumulative basis, with a maximum of 25% during any 30 day period. We may waive in whole or in part on a pari pasu basis among all of the “locked up” shareholders, the lock-up requirement if our management believes, in its sole discretion, that such release would be in the best interest of the Company.
 
Item 5.01 Change in Control of Registrant

and

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
 
As a result of the Share Exchange described in Item 1.01 and Item 2.01 (which description is incorporated herein by reference), the four Broadband Shareholders, Partners, 88 Holdings, MVR Investments, LLC and Cherner acquired greater then 78% of our issued and outstanding Common Stock. Clive Ng is the beneficial owner and control person of both Partners and 88 Holdings. These persons and entities now have complete control over the Company’s affairs and finances.

Pursuant to the Exchange Agreement, new directors and executive officers of the Company and its subsidiaries have been appointed and Mark L. Baum and James B. Panther, II, our sole directors and officers prior to the Closing Date, resigned as officers and directors.

Additional information relating to the business being acquired and to such officers and directors, their share ownership and relation to the Company, is set forth in Items 1.01, 2.01 and 3.01 above and Item 5.02 below, and is incorporated herein by reference.
 
Despite the change of control, we are still a “shell” company and have nominal or no operations as of the Share Exchange.

No assurance can be made that we will be able to complete our business acquisition of Jinan Broadband or, if we complete such acquisition that our business will be successful.

Information relating to the Company’s business and other information required to be provided herein as set forth or incorporated by reference into Item 2.01 above are incorporated by reference herein.

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MANAGEMENT
 
Prior to the Share Exchange, our only two directors and officers were Mark L. Baum, Esq. (our former President and CFO) and James B. Panther, II (our former Secretary) both of which resigned effective as of the Share Exchange.
 
The officers of the Company immediately after the Share Exchange on January 23, 2007 and as of the date hereof are as follows:

Name of Individual
Age
Position
Clive Ng
44
President, Chairman of the Board of Directors
Jiang Bing
42
Vice Chairman, Director
Yue Pu
34
Chief Executive Officer, Director

Clive Ng, Chairman Previously, Mr. Ng co-founded 88 Holdings LLC as a management company strategically focused on investing in and growing media companies, primarily in Asia. Prior to 88 Holdings LLC, he co-founded and was CEO of Pacific Media Plc, a T-commerce company headquartered in Hong Kong (LSE:PCM) and with principal operations in Mainland China. Mr. Ng currently sits on the Board of Directors for Pacific Media. Prior to Pacific Media, he arranged for United International Holdings Inc. (since renamed UnitedGlobalCom, NASDAQ:UCOMA), a US cable company, to enter the Asian market. In 1992, he co-founded TVB Superchannel Europe, a Chinese language broadcaster in Europe. In addition, Mr. Ng was Chairman and founder of Asiacontent (NASDAQ:IASIA), one of the first Asian internet companies to list in the US and was the joint venture of NBCi, MTVi, C-NET, CBS Sportsline and DoubleClick in Asia. Mr. Ng was one of the initial investors and founder of E*TRADE Asia, a partnership with E*TRADE Financial Corp (NYSE: ET). He was also a founding shareholder of MTV Japan, with H&Q Asia Pacific and MTV Networks (a division of Viacom Inc). 

Mr. Jiang Bing, Vice Chairman has over 20 years of technical and operation experience in radio & broadcasting and cable network industry. Mr. Bing is currently and has since early 2006 been, Chairman of Jinan Municipal Cable Network Co. Ltd., the largest municipal cable operator in the Shandong, which doubled its net profit in the first three quarters since the start of his tenure. Mr. Jiang Bing is also Chairman of Jinan Jia He Digital TV Company. Presently, and since 1997, Mr. Bing was an executive officer of Jinan Radio & Television Broadcasting Cable Network. Between 1992 and 1997 Mr. Bing held various positions with Jinan Cable TV Network where he eventually was appointed as deputy chief. Mr. Jiang Bing started his career as a maintenance engineer at Jinan Automobile Company.

Pu Yue , Chief Executive Officer Mr. Pu Yue carries with him more than a decade of Chinese media industry experience spanning across publishing, Internet and TV sectors. Before his media career, Mr. Pu was an intelligence officer with China’s National Security Service and a logistics specialist with the joint venture between Crown Cork & Seal and John Swire & Sons in Beijing. In 1997, he joined Economic Daily, and was head to Internet arm of one of China’s most popular business & entrepreneur magazine, where he spearheaded the set-up of 10,000 member readership club on Internet. He was BD Director and member of the founding team for Macau 5-Star Satellite TV and successfully raised 20 million USD for the Satellite TV venture in year 2000. Mr. Pu also spent two years with Outlook Weekly of Xinhua News Agency as strategic advisor and BD director, facilitating China’s leading national news week to launch a new weekly magazine Oriental Weekly under its portfolio. Mr. Pu spent 16 months with China Media Networks, the TV media arm of HC International, as BD director, before starting up Jinan Broadband. Mr. Pu holds MBA from Jones Graduate School of Business of Rice University and Bachelor in Law from University of International Relations in China.

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Audit Committee
Because we are not an issuer listed on a national securities exchange or listed in an automated inter-dealer quotation system of a national securities association, we are not required to have an audit committee. Although we hope to have an audit committee established at some time in the near future, we have not done so yet.

Since we have not established such a committee, we have not identified any member of such a committee as a financial expert.

Family Relationships

None.

Involvement in Certain Legal Proceedings.

Except as set forth herein, no officer or director of the Company has, during the last five years: (i) been convicted in or is currently subject to a pending a criminal proceeding; (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to any federal or state securities or banking laws including, without limitation, in any way limiting involvement in any business activity, or finding any violation with respect to such law, nor (iii) has any bankruptcy petition been filed by or against the business of which such person was an executive officer or a general partner, whether at the time of the bankruptcy of for the two years prior thereto.
 
Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who beneficially own more than 10% of a registered class of our equity securities, to report their initial beneficial ownership and any subsequent changes in that beneficial ownership of our securities to the Commission. Directors, executive officers and beneficial owners of more than 10% of our Company’s common stock are required by SEC regulations to furnish us with copies of all Section 16(a) forms that they file. Messers. Ng, Bing and Pu have all filed a Form 3 relating to the foregoing transaction late.
 
Code of Ethics

To date, we have not adopted a Code of Ethics as described in Item 406 of Regulation S-B. Given our recent Acquisition, we have not yet had the opportunity to adopt a code of ethics. However, we intend to adopt a code of ethics as soon as practicable.

EXECUTIVE COMPENSATION
 
We currently have an employment agreement in place with Mr. Ng, Mr. Yue Pu and Mr. Jiang as described in Item 1.01 above, the provisions of which are incorporated herein. However, Mr. Ng and Mr. Pu have agreed to defer compensation until the closing of a financing transaction with gross proceeds of $5,000,000 or over.
 
We believe that we have executed the Share Exchange and all of the related transactions set forth above on terms no less favorable to us than we could have obtained from unaffiliated third parties on an arms-length transaction. Additionally, all of the foregoing transactions have been approved by both a majority of the board and a majority of disinterested directors. It is our intention to ensure that all future transactions including loans or any other transactions or commitments between us, our officers and directors and their affiliates are approved by a majority of the board of disinterested board members, and are on terms obtained at an arms-length transactions that are no less favorable to us than we could obtain from unaffiliated third parties. Moreover, it is our intention to obtain estimates from unaffiliated third parties for similar goods or services to ascertain whether such transactions with affiliates are on terms that are no less favorable to us than are otherwise available from unaffiliated third parties.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In October of 2006 we entered into a letter of intent to acquire all of the shares of China Broadband Cayman. Prior to such time none of the Broadband Shareholders as principals of China Broadband Cayman, had any affiliation with the company.
 
Pursuant to the foregoing agreement, we have acquired China Broadband Cayman on January 23, 2007 in exchange for assumption by us of $325,000 7% Convertible Notes which shall be convertible to 2.6% of the outstanding common stock of the Company (currently estimated at 1,300,0000, based on 50,000,000 shares outstanding) shares of our Common Stock and the issuance of 3,582,753 shares of Common Stock to 88 Holdings, Inc., and 31,000,000 shares of Common Stock to Partners, both of which are entities owned or controlled by Mr. Clive Ng, 1,900,000 shares of Common Stock to Stephen P. Cherner and 1,382,753 shares of Common Stock to MVR Investment, LLC. Additionally, Maxim Financial has also acquired 300,000 shares of Common Stock from an entity owned by our existing director and shareholder prior to the Share Exchange, Mark L. Baum.
 
Our acquisition of China Broadband Cayman was negotiated on an arms length basis between the principals of China Broadband Cayman and our principal officer and director, Mr. Baum. There was no relationship between the parties prior to such transaction.

Consulting Agreement with Maxim Financial Corporation

Prior to our acquisition of China Broadband Cayman, its formation and operations, including the expenses relating to our acquisition in China, was funded by Maxim Financial Corporation, Boulder Colorado (“Maxim Financial”), which is one of the principal Broadband Shareholders prior to the Share Exchange. Maxim Financial and its principals own an aggregate of 2,200,000 shares of common stock of which 1,900,000 were received as a result of the Share Exchange, and 200,000 Offering Shares and 100,000 Warrants were acquired in the November 2006 Offering at the same price and terms as provided to all other investors. Since July of 2006 and through the closing date, Maxim Financial Corporation has paid the following expenses on our behalf:

 
·
Maxim has covered the costs for two employees for purposes of providing administrative and accounting services for China Broadband Cayman,
 
·
Maxim has provided lease space, for 1,000 Sq. feet of office and related space at cost, the cost of which will was discharged under the terms of the consulting agreement with Maxim, and which space is still occupied by us,
 
·
Maxim loaned approximately $50,000 to cover legal, travel and other expenses relating to the Acquisition and related transactions.

We have also entered into a consulting agreement with Maxim effective as of January 24th, 2007, pursuant to which, among other things:

 
·
Maxim agreed to discharge all of China Broadband Cayman’s debt obligations to it under the office lease since July of 2006 and to enter into a sublease for such space, at cost, rent under which will be waived through December 31, 2007,
 
·
Maxim agreed to provide consulting and office related services through December 31, 2007,
 
·
We agreed to reimburse Maxim for all past out of pocket, legal, travel and other expenses relating to the Acquisition,
 
·
We issued to Maxim 3,974,800 warrants, exercisable at $.60 per share, which expire on March 24, 2009, and agreed to reimburse Maxim Financial for all travel, legal, administrative and related costs relating to our acquisition and financial restructuring activities.

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We believe that the entry into the office lease with Maxim and all transactions entered into with Maxim were at terms no less favorable to us then as otherwise available to us in arm’s length transactions with third parties.
 
Conflicts of Interest
Certain potential conflicts of interest are inherent in the relationships between our officers and directors of and us.

Conflicts Relating to Officers and Directors

A controlling majority of our shares are owned directly or indirectly by Clive Ng, our Chairman and President. As such, Mr. Ng will have the ability to control our business decisions and appointment or removal of all officers and directors.

From time to time, one or more of our affiliates may form or hold an ownership interest in and/or manage other businesses both related and unrelated to the type of business that we own and operate. These persons expect to continue to form, hold an ownership interest in and/or manage additional other businesses which may compete with ours with respect to operations, including financing and marketing, management time and services and potential customers. These activities may give rise to conflicts between or among the interests of ours and our subsidiaries and Jinan Parent and our and other businesses with which our affiliates are associated. Our affiliates are in no way prohibited from undertaking such activities, and neither we nor our shareholders will have any right to require participation in such other activities.

Further, because we intend to transact business with some of our officers, directors and affiliates, as well as with firms in which some of our officers, directors or affiliates have a material interest, potential conflicts may arise between the respective interests of the Company and China Broadband and these related persons or entities. We believe that such transactions will be effected on terms at least as favorable to us as those available from unrelated third parties.

With respect to transactions involving real or apparent conflicts of interest, we have adopted policies and procedures which require that: (i) the fact of the relationship or interest giving rise to the potential conflict be disclosed or known to the directors who authorize or approve the transaction prior to such authorization or approval, (ii) the transaction be approved by a majority of our disinterested outside directors, and (iii) the transaction be fair and reasonable to us at the time it is authorized or approved by our directors.

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PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding our Common Stock beneficially owned as of the closing date of this offering, presuming the closing of the acquisition of China Broadband Cayman and as adjusted after giving effect to the sale of the maximum number of Shares in this Offering for (i) each shareholder we know to be the beneficial owner of 5% or more of our outstanding Common Stock, (ii) each of our executive officers and directors, and (iii) all executive officers and directors as a group. In general, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of such security, or the power to dispose or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which the person has the right to acquire beneficial ownership within 60 days. To the best of our knowledge, subject to community and martial property laws, all persons named have sole voting and investment power with respect to such shares, except as otherwise noted. At March 18, 2007 we had 50,000,000 shares of Common Stock outstanding (inclusive of 1,435,000 shares issued in escrow) with 5,000,000 shares issuable upon exercise of warrants at $.60 per share and 3,282,500 shares issuable upon exercise of the Common Stock Purchase Warrants.

The following table excludes any shares of the Company's Common Stock which may be issued for the round up of fractional shares and the special treatment to preserve round lot shareholders in connection with the Reverse Split.

 
Name of Beneficial Owner
 
 
Amount of Beneficial Ownership After Share Exchange(1)
 
 
 
Percent of Beneficial Ownership After Share Exchange(1)
 
Clive Ng (2)
   
36,017,753 (3
)
 
72.0
%
Jiang Bing (4)
   
0
   
*
 
Pu Yue (5)
   
0
   
*
 
Mark L. Baum, Esq. (6)
   
3,000,000 (6
)
 
5.9
%
All directors and executive officers as a step
   
39,165,506
   
78.3
%

 
(1)
Indicates share holdings at the time of this filing.
 
(2)
Addresses of Clive Ng is c/o China Broadband Ltd., 1900 Ninth Street, 3rd Floor, Boulder, Colorado 80302.
 
(3)
Includes 3,582,753 shares issued to 88 Holdings, an entity of which Mr. Ng owns. Also includes 31,000,000 shares and held by China Broadband Partners, Ltd., an entity of which Mr. Ng owns. Also includes 1,435,000 shares held in escrow on behalf of the Broadband Shareholders over which Mr. Ng has voting control. Mr. Ng. disclaims all beneficial ownership over 124,407 of these escrow shares.
 
(4)
Addresses of Jiang Bing is No. 32, Jing Shi Yi Road, Jinan, Shandong 250014.
 
(5)
Address of Pu Yue is Apartment 2001, Bld. 2 , No. 1 Xiangheyman Road, Dongcheng District, Beijing, China 100028.
 
(6)
Indicates shares held by BCGU, LLC which is owned by Mr. Baum and Mr. Panther, our former directors and executive officers, before the closing of the Share Exchange. Address of Mark Baum is c/o 2038 Corte Del Nogal, Suite 110, Carlsbad, California 92011. Share amounts include warrants to purchase 500,000 Shares exercisable at $.60 per share to be issued at closing of this offering, all of which are exercisable within 60 days of the date hereof.

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INDEMNIFICATION OF DIRECTORS AND OFFICERS

Pursuant to the provisions of Nevada Revised Statutes, or NRS, 78.7502, every Nevada corporation has authority to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, except an action by or in the right of the corporation, by reason of the fact that such person is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses, including attorneys’ fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred in connection with the action, suit, or proceeding if such person acted in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interest of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause or belief his conduct was unlawful.
  
Pursuant to the provisions of NRS 78.7502, every Nevada corporation also has the authority to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against expenses including amounts paid in settlement and attorneys’ fees actually and reasonably incurred by such person in connection with the defense or settlement of the action or suit if such person acted in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the corporation. No indemnification shall be made, however, for any claim, issue or matter as to which a person has been adjudged by a court of competent jurisdiction to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court determines that in view of all the circumstances, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
 
To the extent any person referred to in the two immediately preceding paragraphs is successful on the merits or otherwise in defense of any action, suit, or proceeding, the NRS provides that such person must be indemnified by the corporation against expenses including attorneys’ fees, actually and reasonably incurred by him in connection with the defense.
 
NRS 78.751 requires the corporation to obtain a determination that any discretionary indemnification is proper under the circumstances. Such a determination must be made by the corporation’s stockholders; its board of directors by majority vote of a quorum consisting of directors who were not parties to the action, suit, or proceeding; or under certain circumstances, by independent legal counsel.
 
Our certificate of incorporation provides that we shall indemnify our directors and officers to the fullest extent provided by the Nevada corporations law; provided that we may condition the payment of indemnification claims made prior to the final disposition of a proceeding on the officer or director providing us with an undertaking that he or she will reimburse us for all payments advanced if it is ultimately established the officer or director was not entitled to indemnification.
 
In addition, NRS 78.138.7 provides that directors and officers are not personally liable to the corporation or its stockholders for any damages resulting from their breach of fiduciary duties unless it is proven that the act or omission constituted a breach of fiduciary duty and the breach involved intentional misconduct, fraud, or a knowing violation of law.
 
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 WHERE YOU CAN FIND ADDITIONAL INFORMATION
 
We file reports, proxy statements and other information with the Securities and Exchange Commission, or SEC. You may read and copy these reports, proxy statements and other information at the SEC's Public Reference Room at 100 F St., N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. The SEC maintains an internet site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC, including our company. We will provide, at our cost, a copy of our Annual Report on Form 10-KSB upon request of shareholders.
 
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Item 9.01 Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

N/A 

(b) Pro forma financial information. The following pro forma financial information is filed as Exhibit 99.2 to this Current Report and is incorporated herein by reference:
N/A

(c) Shell company transactions.

N/A

(d) Exhibits.

The Exhibits to this report are listed in the Index to Exhibits which immediately follows the signature page hereto.
 
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
ALPHA NUTRA, INC.
 
 
 
 
 
 
Date: March 19, 2007
By:  
/s/ Clive Ng
 
Principal Financial Officer and Principal Executive Officer
 
 
 
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INDEX TO EXHIBITS
 
Exhibits
Description
4.1
Form of Registration Rights Agreement entered into with Respect to November 2006 Offering.
   
4.2
Form of Convertible Note issued by China Broadband, Ltd., assumed by Alpha Nutra, Inc.
 
 
10.1
Cooperation Agreement, dated as of December 26, 2006, between China Broadband Ltd, and Jinan Guangdian Jiahe Digital Television Co., Ltd.
10.2
Share Exchange Agreement entered into by and among the Company, China Broadband, Ltd., and its shareholders, dated as of January 23, 2007.
10.3
Form of Subscription Agreement, with respect to November 2006 Offering.
 
 
10.4
Form of Warrant issued to Investors in November 2006 Offering.
   
10.5
Form of  Warrant issued to Maxim Financial Corporation, exercisable at $.60 per share.
   
10.6
Employment Agreement entered into between Alpha Nutra, Inc., and Clive Ng., dated as of January 24, 2007.
   
10.7
Employment Agreement entered into between Alpha Nutra, Inc., and Jiang Bing, dated as of January 24, 2007.
   
10.8
Employment Agreement entered into between Alpha Nutra, Inc. and Yue Pu, dated as of January 24, 2007.
   
10.9
Consulting Agreement with Maxim Financial Corporation. *
   
10.10
Form of 500,000 Share Common Stock Purchase Warrant issued to BCGU, LLC, exercisable at $.60 per share.*
 
* To be filed by amendment.
 
22

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REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of _________________ ____ , 2007, by and among Alpha Nutra, Inc., d/b/a China Broadband a Nevada corporation (the “Company”), and each of the parties listed on Schedule A hereto (together with its respective affiliates and any assignee or transferee of all of its respective rights hereunder, the “Investor”). (The Company and the Investor may sometimes be referred to herein individually as a “party” and collectively as the “parties.”)

RECITALS

A. The Company is offering for sale to certain Investors listed on Schedule A hereto (the “November Offering Investors”), shares of its restricted common stock (the “Common Stock” and, the shares sold to the November Offering Investors are hereinafter referred to as the “Shares”) and Redeemable Common Stock Purchase Warrants (the “Warrants” and, the Common Stock issuable upon exercise of the Warrants are sometimes referred to herein as the “Warrant Shares”) pursuant to a private placement memorandum, as amended (the “Memorandum”) and subscription agreement (the “Offering”).

B. To induce the November Offering Investors to acquire Shares and Warrants in the Offering and to encourage and facilitate exercises of the Warrants, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “1933 Act”), and applicable state securities laws.

C. The Company has entered into an agreement to acquire China Broadband, Ltd, a Cayman Islands company (“China Broadband Cayman”), pursuant to which, among other things, the Company has agreed to assume China Broadband Cayman’s obligations $325,000 principal amount of 7% Convertible Notes upon or before closing of the Offering and to register for re-sale (i) shares of the Company’s Common Stock underlying said notes (the “Conversion Shares”) which Conversion Shares underlie the notes held by the note Investors therein (the “Convertible Note Investors”) and (ii) shares of the Company’s Common Stock issued or to be issued to certain affiliates of the Company and of China Broadband Cayman (“Existing Shareholders”) as consideration for the acquisition (the “Existing Shares”), hereto.

D. Certain other consultants, placement agents or other persons have been issued securities as set forth on Schedule A which securities are also subject to this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:
 

 
1. DEFINITIONS.

a. As used in this Agreement, the following terms shall have the following meanings:

(i) “Company” means the Company set forth in the preamble to this agreement or its successor in interest.

(ii) Investor” means the November Offering Investors, and the holders or beneficial owners of Conversion Shares and Existing Shares and warrants, and all other persons set forth on Schedule A hereto, as amended from time to time, and any transferee or assignee who agrees to become bound by the provisions of this Agreement in accordance with Section 9 hereof.

(iii) register,” “registered,” and “registration” refer to a registration effected by preparing and filing a Registration Statement or Statements in compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous basis (“Rule 415”), and the declaration or ordering of effectiveness of such Registration Statement by the United States Securities and Exchange Commission (the “SEC”).

(iv) Registrable Securities” means the (i) Shares, (ii) any Warrant Shares (but not the Warrants) or shares underlying warrants issued to the Placement Agent, or their affiliates in connection with the Offering or previously issued to such Placement Agent or shares and shares underlying warrants held by the principal shareholders of the Company prior to the acquisition of China Broadband Cayman, (iv) the Existing Shares, and (iii) any shares issued or issuable as a dividend on or in exchange for or otherwise with respect to any of the foregoing. Notwithstanding anything to the contrary contained herein, shares of Common Stock shall cease to be Registrable Securities once they may be sold by the holder under Rule 144(k).

(v) Registration Statement” means a registration statement of the Company under the 1933 Act.

b. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Memorandum.

2. REGISTRATION.

a. The Company shall use reasonable commercial efforts to cause the Parent Company to prepare and file with the SEC within 91 days following the last closing of the Offering (said filing date being referred to herein as the “Filing Date”) a Registration Statement on Form SB-2 (or, if Form SB-2 is not then available, on such form of Registration Statement as is then available to effect a registration of the Registrable Securities, subject to the consent of the Investor, which consent will not be unreasonably withheld) covering the resale of the Registrable Securities.
 
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b. If any offering pursuant to a Registration Statement pursuant to Section 2(a) hereof involves an underwritten offering, the Investors who holds a majority-in-interest of the Registrable Securities subject to such underwritten offering shall have the right to select one legal counsel and an investment banker or bankers and manager or managers to administer the offering, which investment banker or bankers or manager or managers shall be reasonably satisfactory to the Company.

c. [Omitted.]

d. Subject to the last sentence of this Section 2(d), if at any time prior to the expiration of the Registration Period (as hereinafter defined) the Company shall determine to file with the SEC a Registration Statement relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities (other than on Form S-4 or Form S-8 or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans), the Company shall send to each Investor who is entitled to registration rights under this Section 2(d) written notice of such determination and, if within fifteen (15) days after the effective date of such notice, such Investor shall so request in writing, the Company shall include in such Registration Statement all or any part of the Registrable Securities such Investor requests to be registered, except that if, in connection with any underwritten public offering for the account of the Company the managing underwriter(s) thereof shall impose a limitation on the number of shares of Common Stock which may be included in the Registration Statement because, in such underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such Registration Statement only such limited portion of the Registrable Securities with respect to which such Investor has requested inclusion hereunder as the underwriter shall permit. Any exclusion of Registrable Securities shall be made pro rata among the Investor seeking to include Registrable Securities in proportion to the number of Registrable Securities sought to be included by such Investor; provided, however, that the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in such Registration Statement or are not entitled to pro rata inclusion with the Registrable Securities; and provided, further, however, that, after giving effect to the immediately preceding proviso, any exclusion of Registrable Securities shall be made pro rata with holders of other securities having the right to include such securities in the Registration Statement other than holders of securities entitled to inclusion of their securities in such Registration Statement by reason of demand registration rights. No right to registration of Registrable Securities under this Section 2(d) shall be construed to limit any registration required under Section 2(a) hereof. If an offering in connection with which an Investor is entitled to registration under this Section 2(d) is an underwritten offering, then each Investor whose Registrable Securities are included in such Registration Statement shall, unless otherwise agreed by the Company, offer and sell such Registrable Securities in an underwritten offering using the same underwriter or underwriters and, subject to the provisions of this Agreement, on the same terms and conditions as other shares of Common Stock included in such underwritten offering. Notwithstanding anything to the contrary set forth herein, the registration rights of the Investor pursuant to this Section 2(d) shall only be available in the event the Company fails to timely file, obtain effectiveness or maintain effectiveness of any Registration Statement to be filed pursuant to Section 2(a) in accordance with the terms of this Agreement. Notwithstanding the foregoing, the Company shall not be required to include Registrable Securities in any Registration Statement (excluding a Registration Statement filed pursuant to Section 2(a)) if the Company is prohibited from doing so pursuant to an agreement that is in effect on the date hereof. The Company shall have the right to terminate or withdraw any Registration Statement prior to the effectiveness thereof whether or not any Investor has elected to include Registrable Securities in such Registration Statement.
 
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3. OBLIGATIONS OF THE COMPANY. In connection with the registration of the Registrable Securities, the Company shall have the following obligations:

a. The Company shall prepare promptly, and file with the SEC not later than the Filing Date, a Registration Statement with respect to the number of Registrable Securities provided in Section 2(a), and thereafter use its best efforts to cause such Registration Statement relating to Registrable Securities to become effective as soon as possible after such filing and keep the Registration Statement effective pursuant to Rule 415 at all times until such date as is the earlier of (i) the date on which all of the Registrable Securities have been sold and (ii) the date on which the Registrable Securities (in the opinion of counsel to the Investor) may be immediately sold to the public without registration or restriction (including without limitation as to volume by each holder thereof) under the 1933 Act (the “Registration Period”), which Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein not misleading.

b. The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statements and the prospectus used in connection with the Registration Statements as may be necessary to keep the Registration Statements effective at all times during the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by the Registration Statements until such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in the Registration Statements. In the event the number of shares available under a Registration Statement filed pursuant to this Agreement is insufficient to cover all of the Registrable Securities issued or issuable upon conversion of the Notes and exercise of the Warrants, the Company shall amend the Registration Statement, or file a new Registration Statement (on the short form available therefore, if applicable), or both, so as to cover all of the Registrable Securities, in each case, as soon as practicable, but in any event within forty-five (45) business days after the necessity therefor arises (based on the market price of the Common Stock and other relevant factors on which the Company reasonably elects to rely). The Company shall use its reasonable commercial efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof, but in any event within ninety (90) days after the date on which the Company reasonably first determines (or reasonably should have determined) the need therefor. The provisions of Section 2(c) above shall be applicable with respect to such obligation.
 
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c. The Company shall furnish to each Investor whose Registrable Securities are included in a Registration Statement and its legal counsel (i) promptly (but in no event more than two (2) business days) after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, one copy of each Registration Statement and any amendment thereto, each preliminary prospectus and prospectus and each amendment or supplement thereto, and, in the case of the Registration Statement referred to in Section 2(a), each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any letter or information or any portion thereof which contains information for which the Company has sought confidential treatment or which the Company otherwise deems to be confidential), and (ii) such number of copies of a prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as such Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Investor. The Company will promptly notify each Investor by facsimile of the effectiveness of each Registration Statement or any post-effective amendment. The Company will within a reasonable time period respond to any and all comments received from the SEC (which comments shall promptly be made available to the Investor upon request), with a view towards causing each Registration Statement or any amendment thereto to be declared effective by the SEC as soon as practicable, shall promptly file an acceleration request as soon as practicable (but in no event more than five (5) business days) following the resolution or clearance of all SEC comments or, if applicable, following notification by the SEC that any such Registration Statement or any amendment thereto will not be subject to review and shall promptly file with the SEC a final prospectus as soon as practicable (but in no event more than two (2) business days) following receipt by the Company from the SEC of an order declaring the Registration Statement effective.

d. The Company shall use reasonable efforts to (i) register and qualify the Registrable Securities covered by the Registration Statements under such other securities or “blue sky” laws of such jurisdictions in the United States as the Investor who hold a majority in interest of the Registrable Securities being offered reasonably request, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (a) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (b) subject itself to general taxation in any such jurisdiction, (c) file a general consent to service of process in any such jurisdiction, (d) provide any undertakings that cause the Company undue expense or burden, or (e) make any change in its charter or bylaws, which in each case the Board of Directors of the Company determines to be contrary to the best interests of the Company and its stockholders.
 
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e. In the event Investors who hold a majority-in-interest of the Registrable Securities being offered in the offering selects underwriters for the offering which are accepted by the Company, the Company shall enter into and perform its obligations under an underwriting agreement, in usual and customary form, including, without limitation, customary indemnification and contribution obligations, with the underwriters of such offering.

f. As promptly as practicable after becoming aware of such event, the Company shall notify each Investor of the happening of any event, of which the Company has knowledge, as a result of which the prospectus included in any Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and use its best efforts promptly to prepare a supplement or amendment to any Registration Statement to correct such untrue statement or omission, and deliver such number of copies of such supplement or amendment to each Investor as such Investor may reasonably request; provided that, for not more than thirty (30) consecutive trading days (or a total of not more than sixty (60)) trading days in any twelve (12) month period), the Company may delay the disclosure of material non-public information concerning the Company (as well as prospectus or Registration Statement updating) the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company (an “Allowed Delay”); provided, further, that the Company shall promptly (i) notify the Investor in writing of the existence of (but in no event, without the prior written consent of an Investor, shall the Company disclose to such Investor any of the facts or circumstances regarding) material non-public information giving rise to an Allowed Delay and (ii) advise the Investor in writing to cease all sales under such Registration Statement until the end of the Allowed Delay. Upon expiration of the Allowed Delay, the Company shall again be bound by the first sentence of this Section 3(f) with respect to the information giving rise thereto.

g. The Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of any Registration Statement, and, if such an order is issued, to obtain the withdrawal of such order at the earliest possible moment and to notify each Investor who holds Registrable Securities being sold (or, in the event of an underwritten offering, the managing underwriters) of the issuance of such order and the resolution thereof.

h. The Company shall permit a single firm as counsel designated by the Investor to review such Registration Statement and all amendments and supplements thereto (as well as all requests for acceleration or effectiveness thereof) a reasonable period of time prior to their filing with the SEC, and not file any document in a form to which such counsel reasonably objects and will not request acceleration of such Registration Statement without prior notice to such counsel. The sections of such Registration Statement covering information with respect to the Investor, the Investor’s beneficial ownership of securities of the Company or the Investor intended method of disposition of Registrable Securities shall conform to the information provided to the Company by each of the Investor.
 
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i. [Omitted.]

j. At the request of any Investor, the Company shall furnish, on the date that Registrable Securities are delivered to an underwriter, if any, for sale in connection with any Registration Statement or, if such securities are not being sold by an underwriter, on the date of effectiveness thereof (i) an opinion, dated as of such date, from counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the underwriters, if any, and the Investor and (ii) a letter, dated such date, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any, and the Investor.

k. The Company shall make available for inspection by (i) any Investor, (ii) any underwriter participating in any disposition pursuant to a Registration Statement, (iii) one firm of attorneys and one firm of accountants or other agents retained by the Investor, (iv) one firm of attorneys and one firm of accountants or other agents retained by all other Investor, and (v) one firm of attorneys retained by all such underwriters (collectively, the “Inspectors”) all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall be reasonably deemed necessary by each Inspector to enable each Inspector to exercise its due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information which any Inspector may reasonably request for purposes of such due diligence; provided, however, that each Inspector shall hold in confidence and shall not make any disclosure (except to an Investor) of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement, (b) the release of such Records is ordered pursuant to a subpoena or other order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure in violation of this or any other agreement. The Company shall not be required to disclose any confidential information in such Records to any Inspector until and unless such Inspector shall have entered into confidentiality agreements (in form and substance satisfactory to the Company) with the Company with respect thereto, substantially in the form of this Section 3(k). Each Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and any Investor) shall be deemed to limit the Investor’s ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.

l. The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other order from a court or governmental body of competent jurisdiction or otherwise prepared by an underwriter in connection with its due diligence (provided that the underwriter agrees to keep such information confidential pursuant to the provisions herein), or (iv) such information has been made generally available to the public other than by disclosure in violation of this or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to such Investor prior to making such disclosure, and allow the Investor, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.
 
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m. The Company shall (i) cause all the Registrable Securities covered by the Registration Statement to be listed on each national securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) to the extent the securities of the same class or series are not then listed on a national securities exchange, secure the designation and quotation, of all the Registrable Securities covered by the Registration Statement on Nasdaq or, if not eligible for Nasdaq, on Nasdaq SmallCap or, if not eligible for Nasdaq or Nasdaq SmallCap, on the OTCBB and, without limiting the generality of the foregoing, to arrange for at least two market makers to register with the National Association of Securities Dealers, Inc. (“NASD”) as such with respect to such Registrable Securities.

n. The Company shall provide a transfer agent and registrar, which may be a single entity, for the Registrable Securities not later than the effective date of the Registration Statement.

o. The Company shall cooperate with the Investors who hold Registrable Securities being offered and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the managing underwriter or underwriters, if any, or the Investor may reasonably request and registered in such names as the managing underwriter or underwriters, if any, or the Investor may request, and, within five (5) business days after a Registration Statement which includes Registrable Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the transfer agent for the Registrable Securities (with copies to the Investor whose Registrable Securities are included in such Registration Statement) an instruction letter and an opinion of such counsel with respect to the sale of the Registrable Securities.

p. At the request of the Investors holders of a majority-in-interest of the Registrable Securities, (or, in the case of and Registrable Securities originally issued to the Placement Agent or its affiliates, then Wellfleet Partners, Inc.) the Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and any prospectus used in connection with the Registration Statement as may be necessary in order to change the plan of distribution set forth in such Registration Statement.
 
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q. From and after the date of this Agreement, the Company shall not, and shall not agree to, allow the holders of any securities of the Company to include any of their securities in any Registration Statement under Section 2(a) hereof or any amendment or supplement thereto under Section 3(b) hereof without the consent of the holders of a majority-in-interest of the Registrable Securities.

r. The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Investor of Registrable Securities pursuant to a Registration Statement.

4. OBLIGATIONS OF THE INVESTOR. In connection with the registration of the Registrable Securities, the Investor shall have the following obligations:

a. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that such Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request. At least three (3) business days prior to the first anticipated filing date of the Registration Statement, the Company shall notify each Investor of the information the Company requires from each such Investor.

b. Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the Registration Statements hereunder, unless such Investor has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities from the Registration Statements. Additionally, each Investor agrees to keep all of the information it requires from the Company that is not otherwise known by the public, strictly confidential and to utilize or distribute any information it requires from the Company other than to comply with the laws or subpoena as set forth in Section 3(1) above.

c. In the event Investor holding a majority-in-interest of the Registrable Securities being registered (with the approval of the Investor) determine to engage the services of an underwriter, each Investor agrees to enter into and perform such Investor’s obligations under an underwriting agreement, in usual and customary form, including, without limitation, customary indemnification and contribution obligations, with the managing underwriter of such offering and take such other actions as are reasonably required in order to expedite or facilitate the disposition of the Registrable Securities, unless such Investor has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities from such Registration Statement.

d. Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(f) or 3(g), such Investor will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(f) or 3(g) and, if so directed by the Company, such Investor shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of destruction) all copies in such Investor’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.
 
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e. No Investor may participate in any underwritten registration hereunder unless such Investor (i) agrees to sell such Investor’s Registrable Securities on the basis provided in any underwriting arrangements in usual and customary form entered into by the Company, (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements, and (iii) agrees to pay its pro rata share of all underwriting discounts and commissions and any expenses in excess of those payable by the Company pursuant to Section 5 below.

f. Investor understand and acknowledges that recently, the Securities and Exchange Commission has been extending extensive comments towards registration statements of companies where the registration statements seek to register a significant amount of shares or where the registration statement is filed too early after the close of the offering relating to the securities being registered. Accordingly, in the event that the Company, in its sole reasonable discretion believes, that a reduction in the number of Registrable Securities being registered is in the best interest of the Company then the number of Registrable Securities of all Investors in the Registration Statement shall be reduced by the Company, pari pasu based on the number of Registrable Securities beneficially owned by such Investor.

5. EXPENSES OF REGISTRATION. All reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualification fees, printers and accounting fees, the fees and disbursements of counsel for the Company, and the reasonable fees and disbursements (not to exceed $3,000 in the aggregate) of one counsel selected by the Investor pursuant to Sections 2(b) and 3(h) hereof shall be borne by the Company.

6. INDEMNIFICATION. In the event any Registrable Securities are included in a Registration Statement under this Agreement:

a. To the extent permitted by law, the Company will indemnify, hold harmless and defend (i) each Investor who holds such Registrable Securities, (ii) the directors, officers, partners, employees, agents and each person who controls any Investor within the meaning of the 1933 Act or the Securities Exchange Act of 1934, as amended (the “1934 Act”), if any, (iii) any underwriter (as defined in the 1933 Act) for the Investor, and (iv) the directors, officers, partners, employees and each person who controls any such underwriter within the meaning of the 1933 Act or the 1934 Act, if any (each, an “Indemnified Person”), against any joint or several losses, claims, damages, liabilities or expenses (collectively, together with actions, proceedings or inquiries by any regulatory or self-regulatory organization, whether commenced or threatened, in respect thereof, “Claims”) to which any of them may become subject insofar as such Claims arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or the omission or alleged omission to state therein a material fact required to be stated or necessary to make the statements therein not misleading; (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading; or (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities (the matters in the foregoing clauses (i) through (iii) being, collectively, “Violations”). Subject to the restrictions set forth in Section 6(c) with respect to the number of legal counsel, the Company shall reimburse the Indemnified Person, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by any Indemnified Person or underwriter for such Indemnified Person expressly for use in connection with the preparation of such Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(c) hereof; (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld; and (iii) with respect to any preliminary prospectus, shall not inure to the benefit of any Indemnified Person if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented, such corrected prospectus was timely made available by the Company pursuant to Section 3(c) hereof, and the Indemnified Person was promptly advised in writing not to use the incorrect prospectus prior to the use giving rise to a Violation and such Indemnified Person, notwithstanding such advice, used it. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investor pursuant to Section 9.
 
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b. In connection with any Registration Statement in which an Investor is participating, each such Investor agrees severally and not jointly to indemnify, hold harmless and defend, to the same extent and in the same manner set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement, each person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act, any underwriter and any other stockholder selling securities pursuant to the Registration Statement or any of its directors or officers or any person who controls such stockholder or underwriter within the meaning of the 1933 Act or the 1934 Act (collectively and together with an Indemnified Person, an “Indemnified Party”), against any Claim to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim arises out of or is based upon any Violation by such Investor, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement; and subject to Section 6(c) such Investor will reimburse any legal or other expenses (promptly as such expenses are incurred and are due and payable) reasonably incurred by them in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld; provided, further, however, that the Investor shall be liable under this Agreement (including this Section 6(b) and Section 7) for only that amount as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Investor pursuant to Section 9. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) with respect to any preliminary prospectus shall not inure to the benefit of any Indemnified Party if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented.
 
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c. Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action (including any governmental action), such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. The indemnifying party shall pay for only one separate legal counsel for the Indemnified Persons or the Indemnified Parties, as applicable, and such legal counsel shall be selected by Investor holding a majority-in-interest of the Registrable Securities included in the Registration Statement to which the Claim relates (with the approval of a majority-in-interest of the Investor), if the Investor are entitled to indemnification hereunder, or the Company, if the Company is entitled to indemnification hereunder, as applicable. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is actually prejudiced in its ability to defend such action. The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable.
 
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7. CONTRIBUTION. To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that (i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6, (ii) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of such fraudulent misrepresentation, and (iii) contribution (together with any indemnification or other obligations under this Agreement) by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.

8. REPORTS UNDER THE 1934 ACT. With a view to making available to the Investor the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration (“Rule 144”), the Company agrees that after a Business Combination and once it has become subject to periodic reporting requirements of the SEC under the 1934 Act, to:

a. make and keep public information available, as those terms are understood and defined in Rule 144;

b. file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

c. furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investor to sell such securities pursuant to Rule 144 without registration.

9. ASSIGNMENT OF REGISTRATION RIGHTS. The rights and obligations under this Agreement shall be automatically assignable by the Investor to any transferee of all or any portion of Registrable Securities if: (i) the Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned, (iii) following such transfer or assignment, the further disposition of such securities by the transferee or assignee is restricted under the 1933 Act and applicable state securities laws, (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein, (v) such transfer shall have been made in accordance with the applicable requirements of the Subscription Agreement, and (vi) such transferee shall be an “accredited investor” as that term defined in Rule 501 of Regulation D promulgated under the 1933 Act.
 
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10. AMENDMENT OF REGISTRATION RIGHTS. Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with written consent of the Company, the Investor (to the extent such Investor still owns Registrable Securities) and Investors who hold a majority interest of the Registrable Securities. Any amendment or waiver effected in accordance with this Section 10 shall be binding upon each Investor and the Company.

11. MISCELLANEOUS.

a. A person or entity is deemed to be a holder of Registrable Securities whenever such person or entity owns of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities.

b. Any notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile and shall be effective five days after being placed in the mail, if mailed by regular United States mail, or upon receipt, if delivered personally or by courier (including a nationally recognized overnight delivery service) or by facsimile, in each case addressed to a party. The addresses for such communications shall be:

If to the Company:

C/o China Broadband, Ltd.
1900 Ninth Street, 3rd Floor
Boulder, CO 80302
Attn.: Stephen P. Cherner
   Chief Executive Officer
Tel.: (303) 449-7733
Fax: (303) 449-7799
 
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With copy to:

Hodgson Russ LLP
60 East 42nd Street
37th Floor
New York, New York 10165
Attn: Ronniel Levy, Esq.
Tel.: (212) 661-3535
Fax.: (212) 972-1177

If to a Purchaser:

To the address set forth beside such Purchaser’s name on Schedule A hereto, with a copy to the Placement Agent, as defined in the memorandum relating to the Offering.

Each party shall provide notice to the other party of any change in address.

c. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

d.  THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED NEW YORK, NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.

e. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.
 
-15-

 
f. This Agreement and the Subscription Agreement (including all schedules and exhibits thereto) constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement and the Subscription Agreement supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof.

g. Subject to the requirements of Section 9 hereof, this Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns, including, without limitation, a Parent Company, if a Business Combination is ever consummated.

h. The headings in this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

i. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

j. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

k. Except as otherwise provided herein, all consents and other determinations to be made by the Investor pursuant to this Agreement shall be made by Investor holding a majority of the Registrable Securities, determined as if the all of the Notes then outstanding have been converted into for Registrable Securities.
 
-16-

 
l. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to each Investor by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of any of the provisions under this Agreement, that each Investor shall be entitled, in addition to all other available remedies in law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

m. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

[THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]

-  
-17-


COUNTERPART SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT, DATED _______________ ____, 2007.

IN WITNESS WHEREOF, the undersigned Investors and the Company have caused this Agreement to be duly executed as of the date first above written. [additional signature pages may be added]

  ALPHA NUTRA, INC.
  d/b/a “China Broadband”
     
  By:
 
  Name:
 
  Title:
 
     
     
  INVESTORS
  Individual Investors:
     
   
  Name
 
     
   
  Signature
     
     
  Entity Investors:
     
   
  Entity Name
     
   
  Name/Title of Authorized Officer
     
   
  Signature
 
-18-

 
Schedule A

The Investors
 
 
-19-

EX-4.2 4 v068824_ex4-2.htm
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

Principal Amount: [25,000.00]
Issue Date: August ___, 2006

CHINA BROADBAND, LTD.

7% CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, China Broadband, Ltd., a Cayman Islands Company (the “Borrower”), hereby promises to pay to _____________________, __________________, ________________ (the “Holder”) or its registered assigns or successors in interest or order, without demand, the sum of [Twenty Five Thousand Dollars ($25,000.00)] (“Principal Amount”), with simple and unpaid interest thereon, on February 28, 2007(said date, as may be accelerated herein, is referred to herein as the “Maturity Date”).

This Note (the “Note”) has been issued into pursuant to the terms of a Note Purchase Agreement (the “Note Purchase Agreement”) between the Borrower, the Holder, and certain other holders (the “Other Holders”) of Notes (the “Other Notes”), dated of even date herewith, and shall be governed by the terms of such Note Purchase Agreement. Unless otherwise separately defined herein, all capitalized terms used in this Note shall have the same meaning as is set forth in the Note Purchase Agreement.

1. INTEREST; AMORTIZATION

1.1. Interest Rate. Subject to Section 5.5 hereof, interest payable on this Note shall accrue at a rate per annum (the “Interest Rate”) equal to seven percent (7%). Interest shall be calculated on the basis of a 360-day year. Interest on the Principal Amount shall accrue from the date of this Note and be payable pursuant to Section 2.1 hereof on the Maturity Date, whether by acceleration or otherwise.

1.2. Transfer. Subject to compliance with applicable securities laws, this Note, and the rights evidenced hereby, may be transferred, sold, pledged, hypothecated or otherwise granted as security by any registered holder hereof (a “Transferor”). On the surrender for exchange of this Note, with a duly executed Transferor’s endorsement (the “Transferor Endorsement Form”) and an opinion of counsel reasonably satisfactory to the Company (which requirement may be waived by the Company), that the transfer of this Note will be in compliance with applicable securities laws, the Company at the expense of the Transferor, will issue and deliver to or on the order of the Transferor thereof a new Note or Notes of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the aggregate on the face or faces thereof for the Principal Amount called for on the face or faces of the Note so surrendered by the Transferor. No such transfers shall result in a public distribution of the Note.
 
1


1.3. Replacement. Upon receipt of a duly executed, notarized and written statement (which shall include (a) a covenant from the Holder to indemnify the Borrower against any and all loss or damage attributable to a third-party claim in an amount in excess of the actual amount then due under the Note, and (b) an express authorization that the Borrower may offset any such amounts against amounts then due under the Note) from the Holder with respect to the loss, theft or destruction of this Note (or any replacement hereof), or, in the case of a mutilation of this Note, upon surrender and cancellation of such Note, the Maker shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note.

2. REPAYMENT

2.1. Payment of Interest. All interest and Principal shall be paid on the earlier to occur of the Maturity Date or the date that this Note is converted.

2.2. Prepayment. The Borrower has the option of prepaying the outstanding Principal Amount of this Note and any accrued interest (to the extent not previously paid) thereon, in whole or in part, at any time prior to the Maturity Date upon giving the Holder hereof 30 days written notice and right to convert into such number of Conversion Shares of the Company as would result in the Holder receiving the same number of shares in a Business Combination as it would receive in section 3.2 below.

3. CONVERSION RIGHTS
 
3.1    Mandatory Conversion.  This Note shall become convertible in its entirety at the discretion of the Holder at any time on or after the consummation of a Business Combination into such number of shares of Common Stock of the Parent Company as equals 2.4% of the aggregate issued and outstanding shares of the Parent Company on a fully diluted basis (other then certain shares that may be issued upon exercise of warrants that may be issued in connection with a Major Financing), multiplied by a fraction, the numerator of which is the principal amount of this Note and the denominator of which is 300,000.

3.2  Exercise of Conversion Right- Issuance of Shares.  Upon conversion of this Note, Holders shall receive upon surrender of the Note to the Parent Company along with the instructions for conversion duly executed by the Holder, (i) such number of shares as set forth in 3.1 above and (ii) interest accrued and unpaid through the date of conversion.
 
3.3   Reservation of Shares.  The Company shall, as a condition to entering into any Business Combination, require any Parent Company to assume all of the Company's obligations under the Note, Registration Rights Agreement and Purchase Agreement and to reserve sufficient number of shares for issuance to the Holders upon conversion of this Note in accordance with its terms.
 
2


4. EVENTS OF DEFAULT.
 
4.1. The occurrence of any of the following events, after written notice thereof by the Holder to the Borrower, shall be an “Event of Default” under this Note:
 
4.1.1. the Borrower shall fail to make the payment of any amount of principal or interest outstanding the date such payment is due hereunder, which failure is not cured within ten (10) business days of receipt of notice to the Borrower; or 
 
4.1.2. the Borrower shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or assets, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the United States Bankruptcy Code (as now or hereafter in effect) or under the comparable laws of any jurisdiction (foreign or domestic), (iv) file a petition seeking to take advantage of any bankruptcy, insolvency, moratorium, reorganization or other similar law affecting the enforcement of creditors’ rights generally, (v) acquiesce in writing to any petition filed against it in an involuntary case under United States Bankruptcy Code (as now or hereafter in effect) or under the comparable laws of any jurisdiction (foreign or domestic), (vi) issue a notice of bankruptcy or winding down of its operations or issue a press release regarding same, or (vii) take any action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing; or 
 
4.1.3. a proceeding or case shall be commenced in respect of the Borrower, without its application or consent, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, moratorium, dissolution, winding up, or composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of it or of all or any substantial part of its assets in connection with the liquidation or dissolution of the Borrower or (iii) similar relief in respect of it under any law providing for the relief of debtors, and such proceeding or case described in clause (i), (ii), or (iii) shall continue undismissed, or unstayed and in effect, for a period of sixty (60) days or any order for relief shall be entered in an involuntary case under Noteed States Bankruptcy Code (as now or hereafter in effect) or under the comparable laws of any jurisdiction (foreign or domestic) against the Borrower or action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing shall be taken with respect to the Borrower and shall continue undismissed, or unstayed and in effect for a period of sixty (60) days; or 
 
4.1.4 any material breach of any representation, warranty or covenant of the Company made herein or in the Note Purchase Agreement, the Registration Rights Agreement or any other transaction document or agreement, statement or certificate given in writing pursuant hereto or in connection herewith, which breach is not cured within 21 business days of receipt of notice to the Borrower.; or 

4.1.5 the failure of Borrower to require the assumption of the Borrower’s obligations herein as set forth in Section 3.3; or
 
3

 
4.1.6 except as otherwise set forth herein to the contrary, the failure of the Borrower to pay any amounts due to the Holder herein or in the Note Purchase Agreement or the Registration Rights Agreement within twenty (20) business days of receipt of notice to the Borrower.

4.2. Remedies Upon An Event of Default. If an Event of Default shall have occurred and shall be continuing, the Holder of this Note may at any time at its option, (a) declare the entire unpaid principal balance of this Note, together with all interest accrued hereon, due and payable, and thereupon, the same shall be accelerated and so due and payable, without presentment, demand, protest, or notice, all of which are hereby expressly unconditionally and irrevocably waived by the Borrower; provided, however, that upon the occurrence of an Event of Default described in Sections 4.1.1, 4.1.3 or 4.1.4, the outstanding principal balance and accrued interest hereunder shall be automatically due and payable, or (b) exercise or otherwise enforce any one or more of the Holder’s rights, powers, privileges, remedies and interests under this Note, the Note Purchase Agreement, other transaction document or applicable law. No course of delay on the part of the Holder shall operate as a waiver thereof or otherwise prejudice the right of the Holder. No remedy conferred hereby shall be exclusive of any other remedy referred to herein or now or hereafter available at law, in equity, by statute or otherwise.
 
5. MISCELLANEOUS

5.1. Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by a nationally recognized overnight air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by a nationally recognized overnight courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur or (c) three business days after deposited in the mail if delivered pursuant to subsection (ii) above. The addresses for such communications shall be as follows

(i) if to the Company:   
China Broadband, Ltd.
1900 Ninth Street, 3rd Floor
Boulder, CO 80302
Attn.: Stephen P. Cherner
     Vice president, Secretary
Tel.: (303) 449-7733
Fax: (303) 449-7799
4

 
with a copy
(by facsimile only) to:                      Hodgson Russ LLP
60 East 42nd Street, 37th Floor
New York, New York 10165
Attn: Ronniel Levy, Esq.
Te.: (212) 661-3535
Facsimile: (212) 972-1177

(ii) if to the Holder:                         to the name, address, and facsimile number set forth in the on the books and records of the Company,

with a copy
(by facsimile only) to:                      Westpark Capital, Inc.
                                                          One Penn Plaza
                      Suite 2411
                          New York, New York 10119
Attn: Mark I. Lev
Facsimile: (212) 714-1835

5.2. Amendment Provision. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.

5.3. Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns.

5.4. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles that would result in the application of the substantive laws of another jurisdiction. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state of New York. Both parties and the individual signing this Note on behalf of the Borrower agree to submit to the jurisdiction of such courts. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or unenforceability of any other provision of this Note.

5.5. Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law.

5.6. Construction. Each party acknowledges that it has been afforded the opportNotey to have its legal counsel participated in the preparation of this Note and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Note to favor any party against the other.
 
5


5.7. Stockholder Rights.  Holder is and lender and creditor only and shall not be deemed a stockholder or equity holder of the Company, and shall not have any voting or other rights as a stockholder until such time as the Note is converted in accordance with its terms.

5.8. Remedies Cumulative. This Note shall be deemed an unconditional obligation of the Company for payment of money only. In addition to any other remedies that the Holder may have, or actions that the Holder may take, the Holder (on its/his/her own or with one or more other Holders or through a representative) may enforce this Note by summary or similar proceeding pursuant to New York CPLR 3213 or similar proceeding.

[SIGNATURE PAGE FOLLOWS]
 
6


IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an authorized officer as of the ___th day of ___________, 2006.
 
     
 
CHINA BROADBAND, LTD.
 
 
 
 
 
 
  By:   
 
Name: Stephen P. Cherner
  Title: Vice President, Secretary
 
WITNESS:      
       
       

   

7

EX-10.1 5 v068824_ex10-1.htm
[Reference Translation]
 

 
Cooperation Agreement
 

 
by and between

China Broadband Limited

and

Jinan Guangdian Jiahe Digital Television Co., Ltd.

December 2006
 
 
 

 
 
Table of Contents

Chapter
     
Page
1
 
Definitions and Interpretations
 
2
2
 
New Co Establishment
 
5
3
 
Inter-Company Relationship
 
8
4
 
Representations and Warranties
 
10
5
 
Covenants
 
11
6
 
Conditions Precedent
 
14
7
 
Closing
 
15
8
 
Effectiveness and Termination
 
16
9
 
Events of Breach
 
17
10
 
Force Majeure
 
18
11
 
Confidentiality
 
19
12
 
Miscellaneous
 
20
 
Schedules 
 
A. List of Assets
   
B.
List of Party B’s Key Staff
   
C. List of Governmental Authorizations

Cooperation Agreement
- 1 -

[Reference Translation]

This Cooperation Agreement (Agreement) is entered into on this [26] day of December 2006 in [Jinan], People’s Republic of China (PRC)

by and between

(1)
China Broadband Limited (Party A), a Cayman Islands company with its registered address at [1900 Ninth Street Suite 300 Boulder, CO 80302], the legal representative of which is Stephen Cherner, a United States of America (USA) citizen; and
 
(2)
Jinan Guangdian Jiahe Digital Television Co., Ltd. (Party B), a PRC company with its registered address at [No.32, Jing Shi Yi Road] Jinan, PRC, the legal representative of which is Jiang Bing, a PRC citizen.

RECITALS

A.
Party B is engaged inter alia in the provision of the Business (as defined below) and has obtained the licenses necessary to operate the Business in the PRC.

B.
Party B desires to spin off the Assets (as defined below) to establish with Party A’s Affiliate a new company (New Co) which will cooperate with Party B on the Business.

C.
The parties signed a letter of intent outlining the above on 9 August 2006.

NOW, THEREFORE, the parties agree as follows:

Chapter I Definitions and Interpretations

1.1
Definitions

Unless otherwise indicated, the following terms in this Agreement shall have the meanings set forth below:

 
Affiliate
 
in relation to an entity, means a company:
 
(a)  in which the entity holds, directly or indirectly, at least 10% of the equity interest or voting rights;
 
(b)  which is a Subsidiary of the entity’s Parent Company;
 
Cooperation Agreement
- 2 -

[Reference Translation]
 
     
(c)  which owns or controls, directly or indirectly, any equity interest or voting rights of the Parent Company of the entity; or
 
(d)  which is a Subsidiary of the Parent Company of the entity described in (c) above;
       
 
Appraisal
 
the appraisal on the Assets conducted by a qualified appraisal agent hired by Party B;
       
 
Assets
 
any assets relating to the operation of the Business, as listed in Schedule A; for avoidance of doubt, the total net value of the Assets shall be no less than RMB 83,918,200;
       
 
Business
 
the access services with respect to the wired broadcasting/television broadband, wireless broadband, digital private lines, data transmission, website, Internet content services and Internet value-added services; and other wired and digital television value-added services agreed upon by the parties 
       
 
Closing
 
the date of fulfillment of all the conditions precedent listed in Article 6.1 (unless waived in accordance with Article 6.2.3) which shall occur no later than [February 15th ] 2007, unless extended in accordance with Article 6.2.2;
       
 
Deposit
 
as defined in Article 8.2;
       
 
Exclusive Cooperation Agreement
 
as defined in Article 3.1;
       
 
Force Majeure
 
any earthquake, storm, fire, flood, war or other significant event of natural or human-caused disaster arising after signing hereof which is unavoidable, not possible to overcome, beyond the control of either party and prevents the total or partial performance of this Agreement by either party;
       
 
Governmental Authorizations
 
as defined in Article 4.2.5;
 
Cooperation Agreement
- 3 -

[Reference Translation]
 
 
Hong Kong
 
as defined in Article 12.4.2.2;
       
 
Networks Center
 
Jinan Broadcasting and Television Information Networks Center, which holds 48% equity of Party B’s equity interest;
       
 
Parent Company
 
in relation to an entity, means an entity of which a company is a Subsidiary (as defined below);
       
 
PRC Law
 
all laws and legislation of the PRC that are in effect, including laws, regulations, resolutions, decisions, decrees and orders of government agencies and other documents of a legislative, administrative or judicial nature;
       
 
RMB
 
Renminbi, the lawful currency of the PRC;
       
 
Subsidiary
 
in relation to an entity, means an entity in which another company holds, directly or indirectly, 50% or more of the entity’s total equity interest or voting rights;
       
 
Tax
 
all forms of taxation, including enterprise income tax, business tax, value-added tax, stamp duty and individual income tax levied by the PRC tax authorities pursuant to PRC Law, as well as any penalty, surcharge or fine in connection therewith;
       
 
Trade Secret
 
any information relating to this Agreement or the parties, including any information regarding costs, technologies, financial contracts, future business plans and any other information deemed by the parties to be confidential, and which is unknown by the public, has practical value and is of economic benefit to the relevant party;
       
 
Transaction
Documents
 
all documents that require signing under PRC Law in order to complete the transactions contemplated under this Agreement;
       
 
Transferred Staff
 
as defined in Article 2.4.1;
       
 
USD
 
United States Dollar, the lawful currency of the United States of America.
 
Cooperation Agreement
- 4 -

[Reference Translation]
 
1.2
Interpretations

All headings used herein are for reference purposes only and do not affect the meaning or interpretation of any provision hereof. Any reference herein to an Article, Chapter or Schedule is to an article, chapter or schedule of this Agreement. The use of the plural shall include the use of the singular, and vice versa. Unless otherwise indicated, a reference herein to a day, month or year is to a calendar day, month or year. A reference to a business day is to a day on which commercial banks are open for business in the PRC. The use of the masculine shall include the use of the feminine, and vice versa. The term “including”, shall mean “including without limitation”.

Chapter II New Co Establishment

2.1
Asset Appraisal

2.1.1 Party B shall, at its own expense, hire a qualified appraisal agent to conduct the Appraisal.

2.1.2 Party B covenants that the Appraisal shall be completed no later than   20th  December 2006.

2.2
Establishment of New Co

2.2.1
As soon as practicable after the completion of the Appraisal, Party B shall contribute the Assets to the New Co.

2.2.2
The registered capital of the New Co shall be RMB 83,918,200. Party A shall contribute to the New Co cash equivalent of RMB 42,798,300 in installments, and shall enjoy 51% equity interests in the New Co. Party B shall contribute the Assets to New Co and shall be entitled to 49% equity interests in the New Co.

2.2.3
Party B’s contribution of the Assets to the New Co’s registered capital shall be made in accordance with the appraised value of the Assets as stated in the Appraisal report, and shall be made as soon as practicable after completion of Approval.

2.2.4
The New Co’s business scope shall include the provision of wired broadcasting/television broadband and wireless broadband access services, data transmission via private networks, Internet content and website services, consulting, software, system integrity, project consignment and other digital television value-added services agreed by the parties. The business scope of the New Co. shall be subject to the examination and approval of the governmental authorities.
 
Cooperation Agreement
- 5 -

[Reference Translation]
 
2.3
Governmental Approvals

Party B shall, at its own expense, obtain any and all prior approvals, consents and (or) certificates and make all filings, necessary under PRC Law for the establishment of the New Co. The relevant fees shall be allocated in accordance with the parties’ respective shares of equity interests in the New Co.

2.4
Retention / Dismissal of Employees

2.4.1
Party B shall provide Party A with written notice as to which of Party B’s employees will be retained by the New Co (Transferred Staff), which personnel shall include the key staff members listed in Schedule B. Such list shall be subject to the confirmation of the parties.

2.4.2
Party B shall be responsible for any costs related to any labor disputes that may arise at any time from Transferred Staff in respect of their employment relationship with Party B.

2.4.3
Party B shall ensure that any arrangement which it makes with the Transferred Staff shall not give rise to or result in any adverse impact on the employee relations, business, reputation, operations or financial or Tax position of Party B or the New Co.
     
    Party B shall ensure that, in connection with the said arrangements, no commitment will be made, and no obligation or liability will be incurred, by the New Co.
     
    In the event that there is any such commitment, obligation or liability (including liability in relation to Tax) in respect of the New Co, Party B shall indemnify the New Co against all losses, claims, damages, costs and expenses arising therefrom.
 
2.4.4
Party B shall make its best efforts to encourage the Transferred Staff to enter into standard employment contracts with the New Co, or sign secondment agreements (containing non-competition and confidentiality commitments) with the Transferred Staff to second the Transferred Staff to the New Co that are satisfactory to Party A.
 
Cooperation Agreement
- 6 -

[Reference Translation]
 
2.5
Corporate Governance

2.5.1
The New Co shall establish a board of directors, consisting of 5 directors. Party A shall appoint 3 directors and Party B shall appoint 2 directors.

2.5.2
The chairman of the New Co’s board shall be appointed by Party B, and the general manager and the financial manager shall both be appointed by Party A’s Affiliate. The parties agree that the first chairman shall be the director of the Networks Center.

2.5.3
The New Co’s board shall review the details of corporate governance as described above and amend the same (if necessary) at any time after the 1 year anniversary of the New Co’s establishment.

2.6
Profit Consolidation

Party B agrees that Party A’s Affiliate may consolidate the New Co’s profits for purposes of financial reports as permitted under applicable laws.  For this purpose, Party B agrees to amend the documents relating to the New Co (including the articles of association) if and when necessary.

Chapter III  Inter-Company Relationship

3.1
Exclusive Cooperation Agreement

As soon as practicable after the establishment of the New Co, Party B shall sign, and cause Networks Center to sign, an exclusive cooperation agreement (Exclusive Cooperation Agreement) with the New Co for a term of 20 years.
 
3.2
Cooperative Scope
 
3.2.1
Party B shall, and shall cause Networks Center to, provide full support and favorable treatment to the New Co with respect to the Business, including causing Networks Center to provide the New Co with mainline, tube, CM physical transmission tube and the favorable treatment on usage of redundant fibers in cable television networks. The details thereof shall be subject to the separate negotiation.

3.2.2
Party B shall provide, and shall cause the Networks Center to provide, the New Co with the favorable treatment of using its server room, business hall, office, project construction services and client service center. In addition, Party B shall, and shall cause Networks Center to, share their respective resources with the New Co.
 
Cooperation Agreement
- 7 -

[Reference Translation]
 
3.2.3
Party B shall, and shall cause the Networks Center to guarantee for the New Co, during the promotion of inter-active digital television business by Party B and the Networks Center, to implement the Internet access services (IP or CM) provided by the New Co as the re-transmission tube in priority, Party B and the Networks Center reach exclusive cooperation with the New Co on CM broadband access services. The Networks Center must guarantee smoothness of the two-way networks. The New Co shall pay the Networks Center the CM maintenance fee according to certain failure rate.

3.2.4
The maintenance fee for IP networks and private networks shall be paid by the New Co to the maintenance provider in broadcasting/television system.

3.3
Revenue Transfer

All the pre-Tax revenues (less the relevant turnover tax) of Party B generated during the 20-year period of the Exclusive Cooperation Agreement and relating to the Business shall be paid by Party B to the New Co as service fees under the Exclusive Cooperation Agreement.

If the parties need to adjust the specific financial arrangement of the revenue transfer under this revenue transfer framework, such as paying all the pre-Tax revenues to the New Co after reduction of direct cost (such as broadband telecommunication fee), Party B will make its best efforts to cooperate with the New Co on the revenue transfer hereof under the premise of compliance with relevant rules.

3.4
Exclusivity

3.4.1
With respect to the transactions or services under the Exclusive Cooperation Agreement, Party B shall not, and shall cause its shareholders to not, directly or indirectly (through agents or otherwise), encourage or solicit any inquiries or accept any proposals by, or engage in any discussions or negotiations with or furnish any information to, any other person or entity concerning any transactions or services under the Exclusive Cooperation Agreement.

3.4.2
If Party B or any of its shareholders receives any proposal or other communication from a third party relating to a proposed cooperation relating to any aspect of the Business, Party B will promptly communicate to Party A the substance thereof.  Party B will cause its shareholders to observe the terms of this Article 3.4, and Party B will be responsible for any breach of this Article 3.4 by any of its shareholders. 

Cooperation Agreement
- 8 -

[Reference Translation]

Chapter IV Representations and Warranties

4.1
Joint Representations and Warranties

 
Each of the parties represents and warrants that:

4.1.1
it has all necessary power and authority to execute, deliver and perform this Agreement and all Transaction Documents to which it is a party;

4.1.2
the execution and performance of this Agreement and any Transaction Documents to which it is a party have been duly and validly authorized by all necessary corporate action; and

4.1.3
the execution, delivery and performance of this Agreement or any Transaction Documents to which it is a party will not contravene, conflict with, or result in a violation of any provision of its organizational documents or any contract, agreement, understanding, other legal arrangement, law or order to which it is subject.

4.2
Representations and Warranties of Party B

 
Party B further represent and warrant to Party A that:

4.2.1
the Assets are free from any encumbrances;

4.2.2
there is no lawsuit, third party claim, order or investigation pending against itself relating to the Assets or Business by any third party, court, or governmental or arbitral body;

4.2.3
all agreements with third parties, including employees and customers, have at all times been honored completely and timely by itself;

4.2.4
the Assets constitute all of the assets used in or necessary for the operation of the Business; and

4.2.5
all consents, approvals, permits and filings (Governmental Authorizations, including the items as listed in Schedule C) required under PRC Law for the due and proper operation of the Business, have been duly obtained from the appropriate authorities and are in full force and effect.  For the avoidance of doubt, the Governmental Authorizations include any and all requirements of any governmental body, including the registrations with the Ministry of Information Industry, the State Administration of Radio, Film and Television, the State Administration of Industry and Commerce, tax bureaus, customs authorities, and the local counterpart of each of the aforementioned governmental bodies.
 
Cooperation Agreement
- 9 -

[Reference Translation]
 
4.3
Independent Effect

The representations and warranties shall be separate and independent and, save as expressly provided, shall not be limited by reference to any of the other representations and warranties or anything in this Agreement.
 
Chapter V Covenants

5.1
Transferred Staff

In respect of the Transferred Staff, Party B shall:
 
5.1.1
fully settle any severance payments with the Transferred Staff, as required by PRC Law;

5.1.2
make all required social security contributions for the Transferred Staff in full and on time, or attend to all necessary procedures to obtain exemptions or waivers of such obligations from relevant government authorities and (or) the Transferred Staff to the extent necessary, to ensure that the Transferred Staff may be employed by the New Co;

5.1.3
fully pay all wages, allowances, subsidies (including medical subsidies), bonuses or other outstanding payments or benefits to all of the Transferred Staff; and

5.1.4
withhold, file and pay the individual income tax payable on wages, bonuses, allowances, subsidies, or other payments or benefits received in respect of the Transferred Staff.

5.2
Assets / New Co

At any time prior to Closing, Party B covenants that it shall not, without the prior written consent of Party A:

5.2.1
create or permit to arise any lien, encumbrance, pledge, mortgage or any security or other third party right or interest on or in respect of any of the Assets or grant or issue, or agree to grant or issue, any guarantee thereover;
 
Cooperation Agreement
- 10 -

[Reference Translation]
 
5.2.2
enter into any transaction or arrangement with respect to the Assets;

5.2.3
depart from the ordinary course of Party B or the New Co’s daily business operations in either of the following respects:

5.2.3.1
it will not enter into any agreements or materially modify or terminate any agreements related to the Business; and

5.2.3.2
it will not enter into any agreements relating to the Business, signed after the date hereof, where the value or consideration of the proposed agreement exceeds USD[1,000] or has a term of more than [3] months, unless Party A provides its prior written consent, which, for the purpose of this Article, shall include consent by e-mail.

5.2.4
increase or agree to increase the remuneration (including bonuses, commissions and benefits in kind) of any of the members of the board of directors or employees of the New Co or provide or agree to provide any gratuitous payment or benefit to any such person or any of their dependents; or

5.2.5
enter into any agreement or arrangement to, or grant any power of attorney or otherwise authorize any other person to, do any of the above.

5.3
Transactions

In respect of the transactions contemplated under this Agreement, Party B shall, using its own expenses, obtain all necessary consents, approvals or authorizations of, or make all necessary declarations, filings or registrations with, any governmental authority in connection with the execution, delivery and performance of this Agreement and any Transaction Documents to which it is a party.
 
Cooperation Agreement
- 11 -

[Reference Translation]
 
5.4
Governmental Authorizations

5.4.1
Party B shall, using its own expenses, ensure that the annual inspection and (or) renewal of Governmental Authorizations (where applicable) are duly and timely made and all Governmental Authorizations are in full force and effect throughout the term under the Exclusive Cooperation Agreement as described in Article 3.1 and any terms extended by the parties thereunder.

5.4.2
Immediately after PRC Law permits, Party B shall use its best efforts to, cause the New Co to obtain the Governmental Authorizations required for the operation of the Business.

5.5
Business

5.5.1
Party B agrees to use its best commercial efforts to continue operating the Business until the parties agree otherwise.

5.5.2
Within 1 year after the establishment of the New Co, the parties to the New Co shall provide working capital support for the New Co, if it is in need of the same.

5.6
Non-Competition

After Closing, Party B shall not, and shall cause its shareholders to not, without the prior written approval of Party A, invest in or manage any business that competes directly (or indirectly) with the Business nor shall it employ, recruit or attempt to recruit any of the Transferred Staff.

5.7
Indemnification by Party B

Party B hereby unconditionally and irrevocably agrees to indemnify in perpetuity Party A and its Affiliates and Subsidiaries and hold them harmless from and against all losses, claims, damages, expenses (including legal expenses) and liabilities which they may sustain, suffer or incur in connection with the transactions contemplated under this Agreement and as a result of any breach of this Agreement or the Transaction Documents.
 
Cooperation Agreement
- 12 -

[Reference Translation]
 
5.8
Notification by Parties

Each party shall forthwith notify the other party upon becoming aware of any event that may show, reveal or cause any of the representations or warranties to be incorrect, untrue, misleading or breached in any material respect or that may have any material adverse effect on the assets or liabilities of the notified party.

Chapter VI Conditions Precedent

6.1
Conditions Precedent

 
Closing is subject to the satisfaction of all of the following conditions precedent:

6.1.1
the execution and delivery of the Transaction Documents by all the parties thereto;

6.1.2
the representations and warranties of Party B remaining true and accurate and being fully adhered to in all material respects at the time of Closing;

6.1.3
the due completion of Party B’s covenants under Articles 5.1, 5.2 and 5.3; and

6.1.4
Party B having no less than 40,000 customers with respect to the Business.

6.2
Satisfaction and Waiver of Conditions Precedent

6.2.1
Party B shall notify Party A upon satisfaction of all of the conditions precedent described in Article 6.1 thereafter within 3 business days. Within 3 business days after the said notification, Party A shall confirm the same in writing to Party B. Closing shall then be arranged within 3 business days after receipt of Party A’s confirmation. 

6.2.2
In the event that the conditions precedent set forth in Article 6.1 are not fulfilled (or waived as provided in Article 6.2.3) on or before [30 March 2007], or such later date as the parties may agree, this Agreement (except Chapter 11, and Articles 12.3 and 12.4) shall become null and void and be of no further effect whatsoever and all the obligations and liabilities of the parties hereunder shall cease and terminate (save for any antecedent breaches of this Agreement).
 
Cooperation Agreement
- 13 -

[Reference Translation]
 
6.2.3
One or more of the conditions precedent listed in Article 6.1 may be waived by Party A at its sole discretion by sending a notice in writing to Party B.
 
Chapter VII Closing

7.1
Closing

Subject to the conditions precedent having been fulfilled (or waived as provided in Article 6.2.3), Closing shall be completed within 1 month after the execution of this Agreement. Closing shall be held at the Beijing offices of TransAsia Lawyers (Suite 2218, China World Tower 1, No. 1 Jianguomenwai Avenue, Beijing, PRC) or at such other location as the parties agree.

At Closing, to the extent not previously executed and delivered, the parties shall execute and deliver, and shall cause any of the other parties thereto to execute and deliver, the Transaction Documents.

7.2
Payment of price

Party A or its Affiliate shall pay the price after Closing in accordance with the following arrangements:

7.2.1
As soon as possible after the Closing, pay USD equivalent to RMB 20,000,000, which amount shall include the Deposit that Party A has paid in accordance with Article 8.2;

7.2.2
Within 9 months after the Closing, upon the fulfillment of Party B’s responsibilities under Article 5.1 to 5.6 and any other conditions agreed by the parties afterward, pay USD equivalent to RMB 22,798,300;

7.2.3
The price mentioned above shall be paid in USD. The exchange rate shall be calculated based on the median rate published by People’s Bank of China of the prior day.
 
Chapter VIII Effectiveness and Termination

8.1
Effective Date

This Agreement shall be effective upon the date of its signing by the parties.

8.2
Deposit

Within 5 business days after the effectiveness of this Agreement, Party A shall pay a USD100,000 deposit (Deposit) to Party B.  The Deposit will be applied against the price under Article 7.2.  Party B will return the Deposit to Party A (or its Affiliate) if this Agreement is terminated for any reason other than if due solely to Party A’s breach of any provisions under this Agreement.
 
Cooperation Agreement
- 14 -

[Reference Translation]
 
8.3
Termination

8.3.1
This Agreement shall terminate with immediate effect if the parties cannot complete the negotiation and execution of the agreements necessary for the transactions contemplated under this Agreement above within 90 days after the execution hereof unless such period is extended by the parties.

8.3.2
This Agreement may be terminated with immediate effect by any party by means of written notice to the other party under any of the following circumstances:

8.3.2.1
where Closing has not occurred on or before 30 March 2007, provided, however, that the right to terminate this Agreement shall not be available to any party whose failure in any material respect to fulfill any obligation under this Agreement shall have been the cause of the failure for any condition precedent to Closing to be satisfied;

8.3.2.2
where the other party has committed a breach of this Agreement, as described in Article 9.1;

8.3.2.3
where the other party becomes insolvent, if an order is made or resolution passed for the administration, winding-up or dissolution of any party (otherwise than for the purposes of a solvent corporate reconstruction), if an administrative or other receiver, manager, liquidator, administrator, trustee or similar officer is appointed over all or a substantial part of the assets of such other party, or if such other party enters into or proposes any composition or arrangement with its creditors generally analogous to the foregoing; or

8.3.2.4
where Force Majeure prevails for a period of 30 days or more and has a material adverse effect on this Agreement.
 
Cooperation Agreement
- 15 -

[Reference Translation]
 
8.4
Consequence Upon Termination

 
Upon termination hereof, this Agreement shall be of no further effect and no party shall have any right against any of the other parties in connection with this Agreement; provided, however, that nothing herein shall relieve any party of any liability before the termination of this Agreement.
 
Chapter IX Events of Breach

9.1
Events of Breach

The occurrence of any of the following events shall constitute a breach of this Agreement:

9.1.1
either party has materially breached the terms hereof or has failed to perform in any material respect its obligations hereunder, and such breach or nonperformance has not been remedied within a period of 10 days after receipt of the other party’s written notice requesting such remedy; and

9.1.2
any representation or warranty made by either party shall prove to have been or become false or misleading in any material respect.

9.2
Liabilities for Breach

Where either party commits a breach of this Agreement, it shall be liable to compensate the other party for any and all damages caused to it as a result of the breach, excluding indirect or consequential damages.

Chapter X Force Majeure

10.1
Consultation

In the event of Force Majeure, the parties shall promptly consult with each other to find a solution to the situation. 
 
Cooperation Agreement
- 16 -

[Reference Translation]
 
10.2
Relief from Obligations

Should the occurrence of a Force Majeure result in either party’s failure to perform its obligations under this Agreement in whole or in part, that party may, unless otherwise stipulated by law, be exempted from performing those obligations to the extent of the effect of the Force Majeure in question.

10.3
Suspension of Performance

Subject to this Chapter 10, the party affected by Force Majeure may suspend the performance of its obligations under this Agreement to the extent and for the duration thereof until the effect of the Force Majeure no longer operates. However, that party shall exert its best efforts to remove any impediments resulting from the Force Majeure and to minimize to the greatest possible extent any damages incurred. With the agreement of the parties, the term of this Agreement shall be extended by the period of such suspension without penalty to either party.

10.4
Written Evidence

The party claiming Force Majeure shall, as soon as possible after the occurrence of the Force Majeure, inform the other party of the situation and specify the reason for its failure to perform this Agreement, so as to minimize the damages inflicted upon that party, and shall provide the other party with written evidence, certified by the relevant government authority, of the occurrence of the Force Majeure.

10.5
Non-Exemption

A party shall not be exempted from performing its obligations under this Agreement where Force Majeure occurs following the delay by that party to perform such obligations.
 
Chapter XI Confidentiality

11.1
Non Disclosure

From the date hereof until 5 years hereafter, neither party shall disclose or communicate to any person, other than to their respective employees and affiliates for the sole purpose of implementing the agreements contemplated hereunder or as instructed by the other parties, any Trade Secret which may be within or may come into its knowledge.
 
Cooperation Agreement
- 17 -

[Reference Translation]
 
11.2
Breach of Obligations

The parties shall take all necessary measures (including the signing of confidentiality agreements) to ensure that their respective directors, employees, agents, contractors, suppliers and advisors also comply with the confidentiality obligations set forth in this chapter, and shall arrange for the summary dismissal without compensation of any such person who breaches these obligations.

11.3
Exceptions

The disclosure of a Trade Secret by either party shall not be deemed to be in breach of this Chapter if any of the following circumstances apply:

11.3.1
the information is in the public domain at the time of disclosure;

11.3.2
the information is disclosed pursuant to the prior written agreement of the parties;

11.3.3
the information is required by any government authority or law to which a party, or its Affiliate, is subject; or

11.3.4
the information is provided to any director, employee, agent, contractor, supplier or advisor of an Affiliate in the ordinary course of business pursuant to the prior written agreement of the parties.
 
Chapter XII Miscellaneous

12.1
Copies

12.1.1
This Agreement shall be executed in 2 sets of original, in the English and Chinese languages, with 1 set of original for each party. If the 2 versions are inconsistent, the Chinese language version shall bind.

12.1.2
This Agreement may be executed in 1 or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute 1 and the same instrument.
 
Cooperation Agreement
- 18 -

[Reference Translation]
 
12.2
Notice

 
All notices and communications (except for the prior consent issued under Article 6.2.4.2) between the parties shall be made in writing and in the English and Chinese languages by fax, delivery in person (including courier service) or registered airmail letter to the appropriate correspondence addresses set forth below:

If to Party A:

 
Address:
 
[1900 Ninth Street Suite 300]
 
Telephone:
 
[001-303-449-7733]
 
Fax:
 
[001-303-449-7799]
 
Attention:
 
[Stephen P. Cherner]
 
If to Party B:

 
Address:
 
[No.32, Jing Shi Yi Road, Jinan ]
 
Telephone:
 
[86531-85655255]
 
Fax:
 
[86531-82953142]
 
Attention:
 
[Bing, Jiang]
 
The time of receipt of the notice or communication shall be deemed to be:

12.2.1
if by fax, at the time displayed in the corresponding transmission record, unless such facsimile is sent after 5:00 p.m. or on a non-business day in the place where it is received, in which case the date of receipt shall be deemed to be the following business day;

12.2.2
if in person (including courier service), on the date that the receiving party signs for the document; or

12.2.3
if by registered mail (including express mail), 7 days after the issuance of a receipt by the post office.

12.3
Governing Law

 
The formation of this Agreement, its validity, interpretation, execution and settlement of disputes hereunder will be governed by PRC Law.

12.4
Dispute Resolution

12.4.1
If any dispute arises out of or in connection with this Agreement, the parties shall attempt in the first instance to resolve such dispute through friendly consultation or mediation.
 
Cooperation Agreement
- 19 -

[Reference Translation]
 
12.4.2
If the dispute cannot be resolved in the above manner within 30 days after the commencement of consultations, either party may submit the dispute to arbitration as follows:

12.4.2.1
all disputes arising out of or in connection with this Agreement shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by a sole arbitrator appointed in accordance with those rules; and

12.4.2.2
the place of the arbitration shall be Hong Kong Special Administration Region of the PRC (Hong Kong) and the arbitration shall be conducted in the English language, with the arbitral award being final and binding upon the parties. If either party cannot travel to Hong Kong to attend a hearing or other meetings in respect of the arbitration, the parties agree that such hearing or meeting shall take place in Shanghai, PRC. The cost of arbitration shall be allocated as determined by the arbitrator. Any award rendered by the arbitrator shall be enforced by any court having jurisdiction upon the losing party or its assets in accordance with the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958).

12.4.3
When any dispute is submitted to arbitration, the parties shall continue to perform their obligations under this Agreement.

12.5
Waiver

 
No failure or delay on the part of either party in the exercise of any right hereunder shall impair such right or be construed to be a waiver of such right or acquiescence in any breach of any representation, warranty, covenant or agreement herein, nor shall any single or partial exercise or waiver of any such right preclude other or further exercise thereof or of any other right.

12.6
Prior Agreement

 
This Agreement supersedes all prior agreements, whether written or oral, between the parties with respect to its subject matter and, along with the Transaction Documents, constitutes the entire agreement between the parties with respect to its subject matter.
 
Cooperation Agreement
- 20 -

[Reference Translation]
 
12.7
Amendment

No amendment or other modification of this Agreement shall be effective unless the same shall be in writing and signed by an authorized representative of both parties, and then such amendment or other modification shall be an integral part of, and have the same effectiveness as, this Agreement.

12.8
Assignment

 
Neither party may assign any of its rights and/or obligations under this Agreement without the prior written consent of the other party. Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of, the successors, heirs, personal representatives, executors and permitted assigns of the parties.

12.9
Severability

 
Where any provision of this Agreement is subject to dispute or is determined by a competent court, arbitral body or government organization to be invalid or unenforceable, the remainder of this Agreement shall continue in full force and effect.

12.10
Cost and Expense

 
Except as otherwise expressly set forth herein or in any related documents, all fees, costs and expenses incurred in connection with the negotiation, execution, delivery and performance of this Agreement and the Transaction Documents shall be paid by the party or parties incurring such fees, costs or expenses.

[The space below is intentionally left blank.]
 
Cooperation Agreement
- 21 -

[Reference Translation]
 
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the date first above written.

China Broadband Limited
 
 
By:

Name: Yue, Pu
Title: Authorized Representative

 
Jinan Guangdian Jiahe Digital Television Co., Ltd.
 

By:

Name: Jiang Bing
Title: Legal Representative
Company Seal:
 
Cooperation Agreement
- 22 -

[Reference Translation]
 
Schedule A

List of Assets

Cooperation Agreement
- 23 -

[Reference Translation]

Schedule B

List of Party B’s Key Staff

Cooperation Agreement
- 24 -

[Reference Translation]
 
Schedule C
 
List of Governmental Authorizations
 
1.
Operating Permit for Value-added Telecoms Business (Information services) (增值电信业务经营许可证(信息服务业务));

2.
Operating Permit for Value-added Telecoms Business (Internet access services) (增值电信业务经营许可证(因特网接入服务业务));

3.
Operating Permit for Radio and Television Program Transmission Services (广播电视节目传送业务经营许可证); and

4.
Operating Permit for Radio and Television Program Production (广播电视节目制作经营许可证).

Cooperation Agreement
- 25 -

EX-10.3 6 v068824_ex10-3.htm
EXHIBIT A
 
SUBSCRIPTION AGREEMENT

This Subscription Agreement (the “Agreement”) is provided in connection with the confidential Private Placement Memorandum (the “Memorandum”) of Alpha Nutra, Inc. d/b/a China Broadband, a Nevada corporation (the “Company”), relating to the offer for sale of the Company’s Units (the “Unit”), each Unit consisting of 50,000 shares of common stock, par value $.001 per share (the “Common Stock”) and 25,000 Redeemable Common Stock Purchase Warrants (the “Warrants” and, the shares issuable upon exercise thereof, the “Warrant Shares”), on a “best efforts”, 160 Unit (or 8,000,000 shares of Common Stock and 4,000,000 Warrants) maximum or 6,000,000 share minimum basis (or 6,000,000 shares of Common Stock and 3,000,000 Warrants). You should not complete or execute this Agreement without first carefully reviewing the Memorandum and exhibits thereto, including, without limitation, the “Risk Factors” section thereof. It is understood that the securities described below are being offered for sale pursuant to an exemption from the registration provisions of the Securities Act of 1933, as amended (the "Securities Act") and in particular, Regulation D. The terms Unit, Common Stock, Warrant and Warrant Shares are sometimes referred to herein as the “Securities”. All capitalized terms not otherwise defined herein shall have the meanings set forth in the Memorandum.

Once you have completed and executed this Agreement, forward the same along with the signature pages for the Registration Rights Agreement and Escrow Agreement (the Registration Rights Agreement, this Agreement, the Escrow Agreement, each as amended from time to time are sometimes collectively referred to herein as the “Transaction Documents”) appended at the end hereof for your convenience, to the Company at c/o China Broadband, Ltd. 1900 Ninth Street, 3rd Floor, Boulder, Colorado 80302 USA, phone number (303) 449-7733. Your subscription may be rejected for any reason or for no reason. You will not have an opportunity to approve disbursements from escrow and you should not deposit funds into escrow without willing to commit to an investment in the Company. Additionally, after the first closing of the offering there will be no escrow requirement and all funds should be deposited directly with the Company. Any funds forwarded to the Escrow Agent after the first closing will be forwarded directly to the Company for acceptance and use.

All funds submitted prior to the first closing of the offering only, shall be either by check made payable to “Hodgson Russ, LLP, as Escrow Agent” or shall be wired in accordance with the following wire instructions:

Bank: Manufacturers and Traders Trust Company
Buffalo: New York
ABA # : 022000046
Account Name: Hodgson Russ LLP
Client’s Trust Account Number #: 10-314-3
Foreign Wire: M & T Swift Code - MANTUS 33

Wire Reference: - “China Broadband, Ltd.”
Wire Contact: Sandy Pulli Ext. 1378

After the first closing, all funds should be forwarded directly to the Company at the wire instructions provided to you by the Placement Agent or the Company and will be available for immediate use by the Company. Additionally, any funds forwarded to the Escrow Agent after the first closing will be forwarded directly to the Company.

1. Subscription. The undersigned (hereinafter referred to as the "Purchaser") hereby subscribes for the number of Units set forth on the signature pages hereof, at a purchase price of US $25,000 per Unit for a total purchase price of $___________________________ (the “Purchase Price”). Accompanying this Agreement is the Purchaser's check or evidence of wire transfer in accordance with the attached wire instructions (the "Payment"), payable to "Hodgson Russ, LLP, as Escrow Agent" in payment of the purchase price for the Units subscribed for hereby (or, if after the first closing date, then such Payment shall be made payable to the Company). The Purchaser understands that once funds are deposited into Escrow and the completed and executed Transaction Documents are submitted by Purchaser, Purchaser will not have any control over disbursement of funds from escrow, and, once the minimum offering amount or greater is closed upon, the Company and Placement Agent may disburse funds from escrow without consent of Purchaser. The Purchaser further understands that after a closing on the minimum offering amount, all further funds in escrow for accepted subscriptions will be disbursed from time to time at the sole discretion of the Company and will be available for immediate use by the Company.
 


2.  Representations, Warranties and Covenants of the Purchaser

2.1  The information set forth on the questionnaire (the “Questionnaire”) immediately following this Agreement is true and accurate in all respects the provisions of which are incorporated herein in their entirety and made a part hereof, as though fully set forth herein and the Purchaser is either an Accredited Investor, as such term is defined in Rule 501 of Regulation D of the Securities Act, or is not a U.S. Person, as defined in the Memorandum. If you are not a U.S. Person, the Company will provide you with an alternate questionnaire.

3. Representations and Warranties of each Purchaser. Each Purchaser hereby represents, warrants and covenants with the Company as follows:

3.1 Legal Power. Each Purchaser has the requisite individual, corporate, partnership, limited liability company, trust, or fiduciary power, as appropriate, and is authorized, if such Purchaser is a corporation, partnership, limited liability company, or trust, to enter into this Agreement, to purchase the Units hereunder, and to carry out and perform its obligations under the terms of the Transaction Documents to which it is a party.

3.2 Due Execution. This Agreement and the other Transaction Documents have been duly authorized, if such Purchaser is a corporation, partnership, limited liability company, trust or fiduciary, executed and delivered by such Purchaser, and, upon due execution and delivery by the Company, this Agreement and such other Transaction Documents will be a valid and binding agreement of such Purchaser.

3.3 Access to Information. Purchaser has thoroughly reviewed this Agreement including, without limitation, Section 3 which discloses certain material information about the Company. Each Purchaser represents that such Purchaser has been given full and complete access to the Company and to all materials relating to the business, finances and operations of the Company and the prospective Business Acquisition and materials relating to the offer and sale of the Units which have been requested by Purchaser or its advisors. Each Purchaser represents that such Purchaser has been afforded the opportunity to ask questions of, and has inquired with, the officers of the Company regarding its business prospects and the Securities, all as such Purchaser or such Purchaser’s qualified representative have found necessary to make an informed investment decision to purchase the Units or exercise the Warrant. Neither such inquiries nor any other due diligence investigation conducted by Purchaser or any of its advisors or representatives shall modify, amend or affect purchaser’s right to rely on the Company’s representations and warranties contained herein. The Purchaser understands that an investment in the Units or exercise of the Warrants involves a significant degree of risk. The Purchaser understands that if the Business Acquisition is not consummated, funds will be returned to the Purchaser less such Purchaser’s pro rata share of the offering expenses.

3.4 Restricted Securities.

3.4.1 Each Purchaser has been advised that the Securities have not been registered under the Securities Act or any other applicable securities laws and that Units (and, upon exercise thereof, shares underlying the Warrants) are being offered and sold pursuant to Section 4(2) of the Securities Act and/or Rule 506 of Regulation D thereunder, or under Regulation S, and that the Company’s reliance upon Section 4(2) and/or Rule 506 of Regulation D and/or on Regulation S, is predicated in part on such Purchaser representations as contained herein. Each Purchaser acknowledges that the Securities will be issued as “restricted securities” as defined by Rule 144 promulgated pursuant to the Securities Act. None of the Securities may be resold in the absence of an effective registration thereof under the Securities Act and applicable state securities laws unless, in the opinion of the Company’s counsel, an applicable exemption from registration is available.

3.4.2 Each Purchaser represents that such Purchaser is acquiring the Securities for such Purchaser’s own account, and not as nominee or agent, for investment purposes only and not with a view to, or for sale in connection with, a distribution, as that term is used in Section 2(11) of the Securities Act, in a manner which would require registration under the Securities Act or any state securities laws.

3.4.3 Each Purchaser understands and acknowledges that the Common Stock and Warrants when issued and, upon exercise of the Warrants the Warrant Shares, will bear substantially the following legend:
 
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION THEREOF UNDER THE SECURITIES ACT OF 1933 AND/OR THE SECURITIES ACT OF ANY STATE HAVING JURISDICTION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
 

 
 
3.4.4 Each Purchaser acknowledges that an investment in the Securities is not liquid and is transferable only under limited conditions. Each Purchaser acknowledges that such securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Each Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act, which permits limited resale of restricted securities subject to the satisfaction of certain conditions and that such Rule is not now available and, in the future, may not become available for resale of any of the Securities.
 
3.4.5 The representations made by each Purchaser on the Purchaser Signature Page and in this Agreement are true and correct and do not omit any material information.
 
3.5 Purchaser Sophistication and Ability to Bear Risk of Loss. Each Purchaser acknowledges that it is able to protect its interests in connection with the acquisition of the Units and can bear the economic risk of investment in such securities without producing a material adverse change in such Purchaser’s financial condition. Each Purchaser, either alone or with such Purchaser’s representative(s), otherwise has such knowledge and experience in financial or business matters that such Purchaser is capable of evaluating the merits and risks of the investment in the Units.
 
3.6 Preexisting Relationship. Each Purchaser has a preexisting personal or business relationship with the Company, one or more of its officers, directors, or controlling persons, or the Placement Agent (as defined herein).
 
3.7 Purchases by Groups. Each Purchaser represents, warrants and covenants that it is not acquiring the Units as part of a group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
 
4. Miscellaneous

4.1 All notices or other communications given or made hereunder shall be in writing and shall be delivered by hand or mailed by registered or certified mail, return receipt requested, postage prepaid, to the undersigned, at the address set forth herein, and to the Company at the address set forth above.

4.2 This Agreement shall be governed by and construed in accordance with the laws of the state of New York applicable to contracts made and wholly performed in that state.

4.3. This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by the party to be bound thereby.

4.4 This Agreement is not transferable or assignable by the Purchaser.

4.5 All references in this Agreement to the "Purchaser" shall include all parties (other than the Company) who execute this Agreement. If the Purchaser is a corporation, partnership, trust or two or more individuals purchasing jointly, note the specific instructions for the Certificate of Corporate, Partnership, Trust and Joint Purchases at page 8 hereof. Please date and sign the certificate.

5. Acceptance of Subscription. It is understood that this subscription is not binding upon the Company until the Company accepts it, and that the Company has the right to accept or reject this subscription in whole or in part in its sole and complete discretion. If this subscription is rejected in whole, the Company shall return the Payment to Purchaser, without interest, and the Company and Purchaser shall have no further obligation to each other hereunder. In the event of a partial rejection of this subscription, a pro rated amount of the Payment will be returned to the Purchaser, without interest.

[Signature Pages Follow]
 

 
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth on the Purchase Signature Page hereto.
 
    PURCHASER
     
   
(By Counterpart Form - See Purchaser Signature Pages following the Questionnaire)
     
     
    COMPANY
     
 
 
 
 
ALPHA NUTRA, INC.
d/b/a China Broadband 
     
   
(By Execution of Acceptance Page following Certificate of Signatory)
 


QUESTIONNAIRE

The undersigned Purchaser has read the Subscription Agreement dated as of ______ __, 2006 and acknowledges that the completion of this Questionnaire and the execution of the Purchaser Signature Page that follows shall constitute the undersigned’s execution of such Agreement. This Questionnaire is and shall remain part of the Agreement. All capitalized terms used herein shall be as defined in such Agreement.

I hereby subscribe for _____________________ Units of Alpha Nutra, Inc., d/b/a China Broadband Inc. at a price of $25,000 per Unit, for a total purchase price of $_________________. The Units consist of 50,000 shares of Common Stock and 25,000 redeemable Warrants.
 
I am a resident of the State of __________________.

 

Please print above the exact name(s) in which the Shares are to be held
 
 
My address is:
 
 
 
 
  
 
[continued]


I agree to keep information relating to the Company strictly confidential and not to discuss or exploit or distribute any of the information herein except to my professional advisors or as necessary to comply with law.

I acknowledge that the offering of the Shares is subject to the Federal securities laws of the United States and state securities laws of those states in which the Shares are offered, and that, pursuant to the U.S. Federal securities laws and state securities laws, the Shares may be purchased by persons who come within the definition of an “Accredited Investor” as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act (“Regulation D”).
 
By initialing one of the categories below, I represent and warrant that I come within the category so initialed and have truthfully set forth the factual basis or reason I come within that category. All information in response to this paragraph will be kept strictly confidential. I agree to furnish any additional information that the Company deems necessary in order to verify the answers set forth below.
 
NOTE: You must either initial that at least ONE category.
 
Individual Purchaser:
(A Purchaser who is an individual may initial either Category I, II, or III)
 
Category I
______
 
I am a director or executive officer of the Company.
       
Category II ______   I am an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with my spouse, presently exceeds $1,000,000.
       
      Explanation. In calculation of net worth, you may include equity in personal property and real estate, including your principal residence, cash, short term investments, stocks and securities. Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.
       
Category III ______   I am an individual (not a partnership, corporation, etc.) who had an individual income in excess of $200,000 in 2004 and 2005, or joint income with my spouse in excess of $300,000 in 2004 and 2005, and I have a reasonable expectation of reaching the same income level in 2006.
 
Entity Purchasers:
 
(A Purchaser which is a corporation, limited liability company, partnership, trust, or other entity may initial either Category IV, V, VI, VII or VIII)
 
Category IV ______   The Purchaser is an entity in which all of the equity owners are “Accredited Investors” as defined in Rule 501(a) of Regulation D. If relying upon this category alone, each equity owner must complete a separate copy of this Agreement.
 
_____________________________________________________
 
_____________________________________________________
 
(describe entity)   _____________________________________________________
 
Category V ______   The Purchaser is a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Units offered, whose purchase is directed by a “Sophisticated Person” as described in Rule 506(b)(2)(ii) of Regulation D.
 

 
Category VI ______   The Purchaser is an organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Units, with total assets in excess of $5,000,000.
 
_____________________________________________________
 
_____________________________________________________
 
               _____________________________________________________
           (describe entity)
 
Category VII ______   The Purchaser is a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940.
 
_____________________________________________________
 
_____________________________________________________
 
               _____________________________________________________
              (describe entity)

Executed this _____ day of _________, 2006 at ____________________, ________________.
 


PURCHASER SIGNATURE PAGE
(For Individual Purchasers)

This Subscription Agreement (including the Questionnaire) is hereby executed and entered into by the below Purchaser.
 
     
     
 
Signature (Individual)
   
   
 
Name (Print)
   
   
 
Street address
   
   
 
City, State and Zip Code
   
   
 
Tax Identification or Social Security Number
   
  (                     )
 
Telephone Number
   
  (                     )
 
Facsimile Number
   
  Address to Which Correspondence Should Be Directed (if different from above)
   
   
 
c/o Name
   
   
 
Street Address
   
   
 
City, State and Zip Code
   
  (                     )
 
Telephone Number
   
  (                     )
 
Facsimile Number


 
PURCHASER SIGNATURE PAGE
(for Corporation, Partnership, Trust or Other Entities)
 
This Subscription Agreement (including the Questionnaire) is hereby executed and entered into by the below Purchaser:
 
     
     
 
Name of Entity
   
   
 
Type of Entity (i.e., corporation, partnership, etc.)
   
   
 
Tax Identification or Social Security Number
   
   
 
State of Formation of Entity
   
   
 
Name of Signatory Typed or Printed
   
  Its:
 

Title
   
   
  Address to Which Correspondence Should Be Directed (if different from above)
   
   
 
c/o Name
   
   
 
Street Address
   
   
 
City, State and Zip Code
   
  (                     )
 
Telephone Number
   
  (                     )
 
Facsimile Number
 
*If Shares are being subscribed for by an entity, the Certificate of Signatory that follows must also be completed.
 


CERTIFICATE OF SIGNATORY

To be completed if Shares are being subscribed for by an entity.
 
I,__________________________________, am the ___________________________ of ________________________________________________________ (the “Entity”).

I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement relating to the sale of Common Stock of China Broadband Inc., and to purchase and hold the Shares. The Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

IN WITNESS WHEREOF, I have hereto set my hand this ______ day of _________, 2006.
 
     
      
 
Signature



ACCEPTANCE PAGE TO NOTE PURCHASE AGREEMENT OF
ALPHA NUTRA, INC. d/b/a China Broadband
 
The Foregoing subscriptions for shares of Common Stock, at a purchase price of $.50 per share, in accordance with the foregoing Subscription Agreement, as amended is hereby AGREED AND ACCEPTED:

Number of Shares for Which Subscription is Accepted: _______________________

Dollar Amount of Investment Accepted:  $______________________
 
ALPHA NUTRA, INC.
d/b/a China Broadband
 
       
By:       

Name:
   
Title:       

Date: _____________________, 2007
 

EX-10.4 7 v068824_ex10-4.htm
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ALPHA NUTRA, INC., D/B/A CHINA BROADBAND THAT SUCH REGISTRATION IS NOT REQUIRED.
 
REDEEMABLE COMMON STOCK PURCHASE WARRANT
 
No. 2007-A-___
Issue Date: January __, 2007

ALPHA NUTRA, INC. [NEW NAME TO BE ___________ AT CLOSING], a corporation organized under the laws of the State of Nevada and doing business as China Broadband (the “Company”), hereby certifies that, for value received_________________________, _____________________________________________, Fax: (___) _______________, or its assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company at any time after the Issue Date until 5:00 p.m., E.S.T on the date that is Twenty Six (26) months from the date hereof (the “Expiration Date”), up to _________ fully paid and non-assessable shares of the common stock of the Company (the “Common Stock”), $.001 par value per share at a per share purchase price of $2.00 (as adjusted from time to time, the “Warrant Exercise Price”). The number and character of such shares of Common Stock and the Warrant Exercise Price issuable upon the exercise of this warrant (the “Warrant”) are subject to adjustment as provided herein. The Company may reduce the Warrant Exercise Price without the consent of the Holder.
 
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Subscription Agreement (the “Subscription Agreement”), entered into by the Company and the Holders pursuant to the Private Placement Memorandum of the Company dated as of November 21, 2006, as amended.
 
As used herein the following terms, unless the context otherwise requires, have the following respective meanings:
 
(a) The term “Company” shall include Alpha Nutra, Inc. and any corporation which shall succeed or assume the obligations of Alpha Nutra, Inc. hereunder.
 
(b) The term “Common Stock” includes (a) the Company's Common Stock as authorized on the date of the Subscription Agreement, and (b) any other securities into which or for which any of the securities described in (a) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.
 
(c) The term “Other Securities” refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise.
 
1. Exercise of Warrant.
 
1.1. Number of Shares Issuable upon Exercise. From and after the Issue Date through and including the Expiration Date, the Holder hereof shall be entitled to receive, upon exercise of this Warrant in whole in accordance with the terms of subsection 1.2 or upon exercise of this Warrant in part in accordance with subsection 1.3, shares of Common Stock of the Company, subject to adjustment pursuant to Section 4.
 
1.2. Full Exercise. This Warrant may be exercised in full by the Holder hereof by delivery of an original or facsimile copy of the form of subscription attached as Exhibit A hereto (the “Subscription Form”) duly executed by such Holder and surrender of the original Warrant within three (3) days of exercise, to the Company at its principal office or at the office of its Warrant Agent (as provided hereinafter), accompanied by payment, in cash, wire transfer or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of shares of Common Stock for which this Warrant is then exercisable by the Warrant Exercise Price then in effect.
 

 
1.3. Partial Exercise. This Warrant may be exercised in whole or in part from time to time (but not for a fractional share) by surrender of this Warrant in the manner and at the place provided in subsection 1.2 except that the amount payable by the Holder on such partial exercise shall be the amount obtained by multiplying (a) the number of whole shares of Common Stock designated by the Holder in the Subscription Form by (b) the Warrant Exercise Price then in effect. On any such partial exercise, the Company, at its expense, will forthwith issue and deliver to or upon the order of the Holder hereof a new Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon payment by such Holder of any applicable transfer taxes) may request, the whole number of shares of Common Stock for which such Warrant may still be exercised.
 
1.4. Fair Market Value. Fair Market Value of a share of Common Stock as of a particular date (the “Determination Date”) shall mean:
 
(a) If the Company's Common Stock is traded on an exchange or is quoted on the National Association of Securities Dealers, Inc. Automated Quotation (“Nasdaq”), National Market System, the NASDAQ SmallCap Market or the American Stock Exchange, LLC, then the closing or last sale price, respectively, reported for the last business day immediately preceding the Determination Date;
 
(b) If the Company's Common Stock is not traded on an exchange or on the NASDAQ National Market System, the NASDAQ SmallCap Market or the American Stock Exchange, Inc., but is traded in the over-the-counter market, then the average of the closing bid and ask prices reported for the last business day immediately preceding the Determination Date;
 
(c) Except as provided in clause (d) below, if the Company's Common Stock is not publicly traded, then as the Holder and the Company agree, or in the absence of such an agreement, by a valuation to be provided by an independent valuation firm selected by the Company; or
 
(d) If the Determination Date is the date of a liquidation, dissolution or winding up, or any event deemed to be a liquidation, dissolution or winding up pursuant to the Company's charter, then all amounts to be payable per share to holders of the Common Stock pursuant to the charter in the event of such liquidation, dissolution or winding up, plus all other amounts to be payable per share in respect of the Common Stock in liquidation under the charter, assuming for the purposes of this clause (d) that all of the shares of Common Stock then issuable upon exercise of all of the Warrants are outstanding at the Determination Date.
 
Notwithstanding the foregoing, for purposes of determining Fair Market Value pursuant to Section 1.8 below, only the value of the Common Stock as set forth in Subsection 1.4(a), 1.4(b) or 1.4(c) above may be considered.
 
1.5. Company Acknowledgment. The Company will, at the time of the exercise of the Warrant, upon the request of the Holder hereof acknowledge in writing its continuing obligation to afford to such Holder any rights to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant. If the Holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights.
 
1.6. Trustee for Warrant Holders. In the event that a bank or trust company shall have been appointed as trustee for the Holder of the Warrants pursuant to Subsection 3.2, such bank or trust company shall have all the powers and duties of a warrant agent (as hereinafter described) and shall accept, in its own name for the account of the Company or such successor person as may be entitled thereto, all amounts otherwise payable to the Company or such successor, as the case may be, on exercise of this Warrant pursuant to this Section 1.
 
1.7 Delivery of Stock Certificates, etc. on Exercise. The Company agrees that the shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the Holder hereof as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three (3) business days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder hereof, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate or certificates for the number of duly and validly issued, fully paid and non-assessable shares of Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such Holder would otherwise be entitled, cash equal to such fraction multiplied by the then Fair Market Value of one full share of Common Stock, together with any other stock or other securities and property (including cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 1 or otherwise.
 
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1.8 Company’s Right to Call.
 
(a) Subject to the provisions of clauses 1.8(b) below, in the event that: (A) the Fair Market Value equals or exceeds 125% of the then applicable exercise price of this Warrant (the “Trigger Price”) and (B) the minimum daily trading volume of the Common Stock is not less than 25,000 shares, each for a period of ten 10 consecutive trading days immediately prior to such notice, then the Company, upon no less than twenty (20) business days’ prior written notice (the “Notice Period”), may call this Warrant in whole or in part with respect to up to 100% of the shares of Common Stock then purchasable pursuant to this Warrant at a redemption price equal to $.10 per share which right shall be exercisable by the Company commencing on one year period prior to the Expiration Date and continuing through the Expiration Date. Notice by the Company of redemption may be made no more than fifteen (15) days after the end of the ten (10) day determination period. Notwithstanding any such notice by the Company, the Holder shall have the right to exercise this Warrant prior to the end of the Notice Period.
 
(b) In connection with any transfer or exchange of less than all of this Warrant, the transferring Holder shall deliver to the Company an agreement or instrument executed by the transferring Holder and the new Holder allocating between them on whatever basis they may determine in their sole discretion any subsequent call of this Warrant by the Company, such that after giving effect to such transfer the Company shall have the right to call the same number of Warrants that it would have had if the transfer or exchange had not occurred.
 
2. [Omitted].
 
3. Adjustment for Reorganization, Consolidation, Merger, etc.
 
3.1. Reorganization, Consolidation, Merger, etc. In case at any time or from time to time, the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other person or (c) transfer all or substantially all of its properties or assets to any other person under any plan or arrangement contemplating the dissolution of the Company, then, in each such case, as a condition to the consummation of such a transaction, proper and adequate provision shall be made by the Company whereby the Holder of this Warrant, on the exercise hereof as provided in Section 1, at any time after the consummation of such reorganization, consolidation or merger or the effective date of such dissolution, as the case may be, shall receive, in lieu of the Common Stock (or Other Securities) issuable on such exercise prior to such consummation or such effective date, the stock and other securities and property (including cash) to which such Holder would have been entitled upon such consummation or in connection with such dissolution, as the case may be, if such Holder had so exercised this Warrant, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 4.
 
3.2. Dissolution. In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, prior to such dissolution, shall at its expense deliver or cause to be delivered the stock and other securities and property (including cash, where applicable) receivable by the Holder of the Warrants after the effective date of such dissolution pursuant to this Section 3 to a bank or trust company (a “Trustee”) having its principal office in New York, NY, as trustee for the Holder of the Warrants.
 
3.3. Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the Other Securities and property receivable on the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any Other Securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 4. In the event this Warrant does not continue in full force and effect after the consummation of the transaction described in this Section 3, then only in such event will the Company's securities and property (including cash, where applicable) receivable by the Holder of the Warrants be delivered to the Trustee as contemplated by Section 3.2.
 
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4. Extraordinary Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock, then, in each such event, the Warrant Exercise Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Warrant Exercise Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Warrant Exercise Price then in effect. The Warrant Exercise Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 4. The number of shares of Common Stock that the Holder of this Warrant shall thereafter, on the exercise hereof as provided in Section 1, be entitled to receive shall be adjusted to a number determined by multiplying the number of shares of Common Stock that would otherwise (but for the provisions of this Section 4) be issuable on such exercise by a fraction of which (a) the numerator is the Warrant Exercise Price that would otherwise (but for the provisions of this Section 4) be in effect, and (b) the denominator is the Warrant Exercise Price in effect on the date of such exercise.
 
5. Certificate as to Adjustments Corresponding Changes to Call Right. In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the exercise of the Warrants, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Warrant Exercise Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the Holder of the Warrant and any Warrant Agent of the Company (appointed pursuant to Section 11 hereof). In the event that the Warrant Exercise Price or number of shares issuable upon exercise be adjusted (or the Warrant is assumed or new warrants issued in exchange therefore) as a result of any of the events described in Sections 3, 4 or 5, then the price at which the Warrants may be called under Section 1.8 above and the Trigger Price (which shall initially be $2.50 per share) shall both be adjusted by multiplying each of said prices then in effect by a fraction, the numerator of which is the number of shares for which this Warrant is exercisable for immediately prior to such adjustment and the denominator of which is the number of shares for which this Warrant is exercisable immediately after such adjustment.
 
6. Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial Statements. The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Warrants, all shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Warrant. This Warrant entitles the Holder hereof to receive copies of all financial and other information distributed or required to be distributed to the holders of the Company's Common Stock.
 
7. Assignment; Exchange of Warrant. Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder hereof (a “Transferor”). On the surrender for exchange of this Warrant, with the Transferor's endorsement in the form of Exhibit B attached hereto (the “Transferor Endorsement Form”) and together with an opinion of counsel reasonably satisfactory to the Company that the transfer of this Warrant will be in compliance with applicable securities laws, the Company at its expense, but with payment by the Transferor of any applicable transfer taxes, will issue and deliver to or on the order of the Transferor thereof a new Warrant or Warrants of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor. No such transfers shall result in a public distribution of the Warrant.
 
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8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense, will execute and deliver, in lieu thereof, a new Warrant of like tenor.
 
9. Registration Rights. The Holder of this Warrant has been granted certain registration rights by the Company. These registration rights are set forth in the Registration Rights Agreement. The terms of the Registration Rights Agreement are incorporated herein by this reference.
 
10. [Omitted].
 
11. Warrant Agent. The Company may, by written notice to the Holder of the Warrant, appoint an agent (a “Warrant Agent”) for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and replacing this Warrant pursuant to Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such Warrant Agent.
 
12. Transfer on the Company's Books. Until this Warrant is transferred on the books of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.
 
13. Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: (i) if to the Company to: China Broadband, Inc., 1900 Ninth Street, 3rd Floor, Boulder, Colorado 80302, telecopier number: (303) 898-0226 with a copy by telecopier only to (not with respect to Forms of Subscription): Ronniel Levy, Esq. Hodgson Russ LLP, 60 East 42nd Street, 37th Floor, New York, New York 10165, telecopier number: (212) 972-1677, and (ii) if to the Holder, to the address and telecopier number listed on the first paragraph of this Warrant.
 
14. Miscellaneous. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. This Warrant shall be construed and enforced in accordance with and governed by the laws of New York. Any dispute relating to this Warrant shall be adjudicated in New York County in the State of New York. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. The parties hereto hereby waived a trial by Jury.
 
5

 
IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.
 
     
 
ALPHA NUTRA, INC.,
      d/b/a “China Broadband”
 
 
 
 
 
 
  By:  
 
 
Name:

  Title:  
     
Witness: 
   
     

  
   
 
6

 
Exhibit A

FORM OF SUBSCRIPTION
(to be signed only on exercise of Warrant)
 
TO: ALPHA NUTRA, INC. d/b/a “China Broadband”
 
The undersigned, pursuant to the provisions set forth in the attached Warrant (No.____), hereby irrevocably elects to purchase (check applicable box):

___       ________ shares of the Common Stock covered by such Warrant.
 
The undersigned herewith makes payment of the full purchase price for such shares at the price per share provided for in such Warrant, which is $___________ in lawful money of the United States.
 
The undersigned requests that the certificates for such shares be issued in the name of, and delivered to _____________________________________________________ whose address is ____________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________
 
The undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”), or pursuant to an exemption from registration under the Securities Act.
 
     
Dated:___________________
   
 
(Signature must conform to name of holder as specified on
the face of the Warrant)
   

 (Address) 
 
7

 
Exhibit B
 
FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
 
For value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading “Transferees” the right represented by the within Warrant to purchase the percentage and number of shares of Common Stock of ALPHA NUTRA, INC. to which the within Warrant relates specified under the headings “Percentage Transferred” and “Number Transferred,” respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on the books of ALPHA NUTRA, INC. with full power of substitution in the premises.
 
Transferees
 
Percentage Transferred
 
Number Transferred
         
         
         
 
     
Dated: ______________, ___________
   
 
(Signature must conform to name of holder as specified on
the face of the warrant)
   
Signed in the presence of:
 
 
               (Name)
 

                (address)
   
ACCEPTED AND AGREED:
[TRANSFEREE]


                 (address)
 

                (Name)
 
 

EX-10.5 8 v068824_ex10-5.htm
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ALPHA NUTRA, INC., D/B/A CHINA BROADBAND THAT SUCH REGISTRATION IS NOT REQUIRED.

REDEEMABLE COMMON STOCK PURCHASE WARRANT
 
No. 2007-C-___
Issue Date: January 23, 2007

ALPHA NUTRA, INC., d/b/a China Broadband, a corporation organized under the laws of the State of Nevada and doing business as China Broadband (the “Company”), hereby certifies that, for value received_________________________, _____________________________________________, Fax: (___) _______________, or its assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company at any time after the Issue Date until 5:00 p.m., E.S.T on March 24, 2009 (the “Expiration Date”), up to _________ fully paid and non-assessable shares of the common stock of the Company (the “Common Stock”), $.001 par value per share at a per share purchase price of $.60 (as adjusted from time to time, the “Warrant Exercise Price”). The number and character of such shares of Common Stock and the Warrant Exercise Price issuable upon the exercise of this warrant (the “Warrant”) are subject to adjustment as provided herein.
 
As used herein the following terms, unless the context otherwise requires, have the following respective meanings:
 
(a) The term “Company” shall include Alpha Nutra, Inc., d/b/a China Broadband and any corporation which shall succeed or assume the obligations of Alpha Nutra, Inc. hereunder.
 
(b) The term “Common Stock” includes (a) the Company's Common Stock as authorized on the date hereof, and (b) any other securities into which or for which any of the securities described in (a) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.
 
(c) The term “Other Securities” refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise.
 
1. Exercise of Warrant.
 
1.1. Number of Shares Issuable upon Exercise. From and after the Issue Date through and including the Expiration Date, the Holder hereof shall be entitled to receive, upon exercise of this Warrant in whole in accordance with the terms of subsection 1.2 or upon exercise of this Warrant in part in accordance with subsection 1.3, shares of Common Stock of the Company, subject to adjustment pursuant to Section 4.
 
1.2. Full Exercise. This Warrant may be exercised in full by the Holder hereof by delivery of an original or facsimile copy of the form of subscription attached as Exhibit A hereto (the “Subscription Form”) duly executed by such Holder and surrender of the original Warrant within three (3) days of exercise, to the Company at its principal office or at the office of its Warrant Agent (as provided hereinafter), accompanied by payment, in cash, wire transfer or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of shares of Common Stock for which this Warrant is then exercisable by the Warrant Exercise Price then in effect.
 
1.3. Partial Exercise. This Warrant may be exercised in whole or in part from time to time (but not for a fractional share) by surrender of this Warrant in the manner and at the place provided in subsection 1.2 except that the amount payable by the Holder on such partial exercise shall be the amount obtained by multiplying (a) the number of whole shares of Common Stock designated by the Holder in the Subscription Form by (b) the Warrant Exercise Price then in effect. On any such partial exercise, the Company, at its expense, will forthwith issue and deliver to or upon the order of the Holder hereof a new Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon payment by such Holder of any applicable transfer taxes) may request, the whole number of shares of Common Stock for which such Warrant may still be exercised.
 

 
1.4. Fair Market Value. Fair Market Value of a share of Common Stock as of a particular date (the “Determination Date”) shall mean:
 
(a) If the Company's Common Stock is traded on an exchange or is quoted on the National Association of Securities Dealers, Inc. Automated Quotation (“Nasdaq”), National Market System, the NASDAQ SmallCap Market or the American Stock Exchange, LLC, then the closing or last sale price, respectively, reported for the last business day immediately preceding the Determination Date;
 
(b) If the Company's Common Stock is not traded on an exchange or on the NASDAQ National Market System, the NASDAQ SmallCap Market or the American Stock Exchange, Inc., but is traded in the over-the-counter market, then the average of the closing bid and ask prices reported for the last business day immediately preceding the Determination Date;
 
(c) Except as provided in clause (d) below, if the Company's Common Stock is not publicly traded, then as the Holder and the Company agree, or in the absence of such an agreement, by a valuation to be provided by an independent valuation firm selected by the Company; or
 
(d) If the Determination Date is the date of a liquidation, dissolution or winding up, or any event deemed to be a liquidation, dissolution or winding up pursuant to the Company's charter, then all amounts to be payable per share to holders of the Common Stock pursuant to the charter in the event of such liquidation, dissolution or winding up, plus all other amounts to be payable per share in respect of the Common Stock in liquidation under the charter, assuming for the purposes of this clause (d) that all of the shares of Common Stock then issuable upon exercise of all of the Warrants are outstanding at the Determination Date.
 
Notwithstanding the foregoing, for purposes of determining Fair Market Value pursuant to Section 1.8 below, only the value of the Common Stock as set forth in Subsection 1.4(a), 1.4(b) or 1.4(c) above may be considered.
 
1.5. Company Acknowledgment. The Company will, at the time of the exercise of the Warrant, upon the request of the Holder hereof acknowledge in writing its continuing obligation to afford to such Holder any rights to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant. If the Holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights.
 
1.6. Trustee for Warrant Holders. In the event that a bank or trust company shall have been appointed as trustee for the Holder of the Warrants pursuant to Subsection 3.2, such bank or trust company shall have all the powers and duties of a warrant agent (as hereinafter described) and shall accept, in its own name for the account of the Company or such successor person as may be entitled thereto, all amounts otherwise payable to the Company or such successor, as the case may be, on exercise of this Warrant pursuant to this Section 1.
 
1.7 Delivery of Stock Certificates, etc. on Exercise. The Company agrees that the shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the Holder hereof as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three (3) business days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder hereof, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate or certificates for the number of duly and validly issued, fully paid and non-assessable shares of Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such Holder would otherwise be entitled, cash equal to such fraction multiplied by the then Fair Market Value of one full share of Common Stock, together with any other stock or other securities and property (including cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 1 or otherwise.  
 
2

 
2. Notwithstanding anything in this Warrant to the contrary, in no event shall the Holder of this Warrant be entitled to exercise a number of Warrants (or portions thereof) in excess of the number of Warrants (or portions thereof) upon exercise of which the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised Warrants and the unexercised or unconverted portion of any other securities of the Company) and (ii) the number of shares of Common Stock issuable upon exercise of the Warrants (or portions thereof) with respect to which the determination described herein is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13D-G thereunder, except as otherwise provided in clause (i) of the preceding sentence. Notwithstanding anything to the contrary contained herein, the limitation on exercise of this Warrant set forth herein may be amended at the sole discretion of the Holder upon providing 61 days written notice to the Company, said notice specifying the exact amount of shares beneficially owned as calculated under Section 13(d) and the exact number of shares for which this Warrant is to be exercised. Holder shall, in the event of such waiver, be responsible for its own securities and related filings.
 
3. Adjustment for Reorganization, Consolidation, Merger, etc.
 
3.1. Reorganization, Consolidation, Merger, etc. In case at any time or from time to time, the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other person or (c) transfer all or substantially all of its properties or assets to any other person under any plan or arrangement contemplating the dissolution of the Company, then, in each such case, as a condition to the consummation of such a transaction, proper and adequate provision shall be made by the Company whereby the Holder of this Warrant, on the exercise hereof as provided in Section 1, at any time after the consummation of such reorganization, consolidation or merger or the effective date of such dissolution, as the case may be, shall receive, in lieu of the Common Stock (or Other Securities) issuable on such exercise prior to such consummation or such effective date, the stock and other securities and property (including cash) to which such Holder would have been entitled upon such consummation or in connection with such dissolution, as the case may be, if such Holder had so exercised this Warrant, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 4.
 
3.2. Dissolution. In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, prior to such dissolution, shall at its expense deliver or cause to be delivered the stock and other securities and property (including cash, where applicable) receivable by the Holder of the Warrants after the effective date of such dissolution pursuant to this Section 3 to a bank or trust company (a “Trustee”) having its principal office in New York, NY, as trustee for the Holder of the Warrants.
 
3.3. Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the Other Securities and property receivable on the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any Other Securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 4. In the event this Warrant does not continue in full force and effect after the consummation of the transaction described in this Section 3, then only in such event will the Company's securities and property (including cash, where applicable) receivable by the Holder of the Warrants be delivered to the Trustee as contemplated by Section 3.2.
 
4. Extraordinary Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock, then, in each such event, the Warrant Exercise Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Warrant Exercise Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Warrant Exercise Price then in effect. The Warrant Exercise Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 4. The number of shares of Common Stock that the Holder of this Warrant shall thereafter, on the exercise hereof as provided in Section 1, be entitled to receive shall be adjusted to a number determined by multiplying the number of shares of Common Stock that would otherwise (but for the provisions of this Section 4) be issuable on such exercise by a fraction of which (a) the numerator is the Warrant Exercise Price that would otherwise (but for the provisions of this Section 4) be in effect, and (b) the denominator is the Warrant Exercise Price in effect on the date of such exercise.
 
3

 
5. Certificate as to Adjustments Corresponding Changes to Call Right. In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the exercise of the Warrants, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Warrant Exercise Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the Holder of the Warrant and any Warrant Agent of the Company (appointed pursuant to Section 11 hereof).
 
6. Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial Statements. The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Warrants, all shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Warrant. This Warrant entitles the Holder hereof to receive copies of all financial and other information distributed or required to be distributed to the holders of the Company's Common Stock.
 
7. Assignment; Exchange of Warrant. Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder hereof (a “Transferor”). On the surrender for exchange of this Warrant, with the Transferor's endorsement in the form of Exhibit B attached hereto (the “Transferor Endorsement Form”) and together with an opinion of counsel reasonably satisfactory to the Company that the transfer of this Warrant will be in compliance with applicable securities laws, the Company at its expense, but with payment by the Transferor of any applicable transfer taxes, will issue and deliver to or on the order of the Transferor thereof a new Warrant or Warrants of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor. No such transfers shall result in a public distribution of the Warrant.
 
8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense, will execute and deliver, in lieu thereof, a new Warrant of like tenor.
 
9. Registration Rights. The Holder of this Warrant has been granted certain registration rights by the Company. These registration rights are set forth in the Registration Rights Agreement. The terms of the Registration Rights Agreement are incorporated herein by this reference.
 
10. [Omitted].
 
11. Warrant Agent. The Company may, by written notice to the Holder of the Warrant, appoint an agent (a “Warrant Agent”) for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and replacing this Warrant pursuant to Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such Warrant Agent.
 
4

 
12. Transfer on the Company's Books. Until this Warrant is transferred on the books of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.
 
13. Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: (i) if to the Company to: China Broadband, Inc., 1900 Ninth Street, 3rd Floor, Boulder, Colorado 80302, telecopier number: (303) 898-0226 with a copy by telecopier only to (not with respect to Forms of Subscription): Ronniel Levy, Esq. Hodgson Russ LLP, 1540 Broadway, 24th Floor, New York, New York 10036-4039, telecopier number: (212) 972-1677, and (ii) if to the Holder, to the address and telecopier number listed on the first paragraph of this Warrant.
 
14. Miscellaneous. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. This Warrant shall be construed and enforced in accordance with and governed by the laws of New York. Any dispute relating to this Warrant shall be adjudicated in New York County in the State of New York. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. The parties hereto hereby waived a trial by Jury.
 
IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.
 
     
 
ALPHA NUTRA, INC.,
d/b/a “China Broadband”
 
 
 
 
 
 
  By:    
 
Name:
  Title:
 
Witness:      
       
       

   
 
5


Exhibit A

FORM OF SUBSCRIPTION
(to be signed only on exercise of Warrant)
 
TO: ALPHA NUTRA, INC. d/b/a “China Broadband”
 
The undersigned, pursuant to the provisions set forth in the attached Warrant (No.____), hereby irrevocably elects to purchase (check applicable box):

___        ________ shares of the Common Stock covered by such Warrant.
 
The undersigned herewith makes payment of the full purchase price for such shares at the price per share provided for in such Warrant, which is $___________ in lawful money of the United States.
 
The undersigned requests that the certificates for such shares be issued in the name of, and delivered to _____________________________________________________ whose address is ___________________________________________________________________________________________________________________________________
_________________________________________________________________________________
 
The undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”), or pursuant to an exemption from registration under the Securities Act.
 
     
Dated:___________________
   
 

(Signature must conform to name of holder as specified on
the face of the Warrant)
   
 

(Address)
 
6

 
Exhibit B
 
FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
 
For value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading “Transferees” the right represented by the within Warrant to purchase the percentage and number of shares of Common Stock of ALPHA NUTRA, INC. to which the within Warrant relates specified under the headings “Percentage Transferred” and “Number Transferred,” respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on the books of ALPHA NUTRA, INC. with full power of substitution in the premises.
 
Transferees
 
Percentage Transferred
 
Number Transferred
          
          
          
 
     
Dated: ______________, ___________
   
 

(Signature must conform to name of holder as specified on the face of the warrant)
   
Signed in the presence of:  
   

(Name)


(address)
   
ACCEPTED AND AGREED:
[TRANSFEREE]


(address)
   

(Name)
 
 

EX-10.6 9 v068824_ex10-6.htm
EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this "Agreement") dated as of February 24, 2007 (the "Effective Date"), between China Broadband, Ltd., a Cayman Islands company (the "Company"), and Clive Ng (the "Executive"), a residing at c/o China Broadband Ltd., 1900 Ninth Street, 3rd Floor, Boulder, Colorado 80302.

WHEREAS, the Company wishes to employ the Executive to render services for the Company or its subsidiary and related entities on the terms and conditions set forth in this Agreement, and the Executive wishes to be retained and employed by the Company on such terms and conditions;

WHEREAS, the Company is the wholly owned subsidiary of Alpha Nutra, Incl, d/b/a China Broadband, a Nevada corporation (the “Parent”);

NOW, THEREFORE, in consideration of the premises, the mutual agreements set forth below and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1. Employment. The Company hereby employs the Executive, and the Executive accepts such employment and agrees to perform services for the Company, for the period and upon the other terms and conditions set forth in this Agreement.

2. Term. The term of the Executive's employment hereunder shall commence on the Effective date, and unless terminated at an earlier date in accordance with Section 8 hereof, shall extend through July 7, 2009 (the "Term"), unless extended by the parties in writing. Notwithstanding the foregoing, all Base Salary compensation only shall accrue and be paid until the closing of a financing with gross proceeds of $5,000,000 in one or more closings (a “Qualified Offering”). All other compensation and rights shall accrue from the date hereof and onward.
 
3. Position and Duties.

(a) Service with Company. During the term of the Executive's employment, the Executive shall serve in the position of President and Chairman of the Company, and Executive shall have the authority, duties and responsibilities generally associated with such position and as may be determined by the Board of Directors (the “Board”) of the Company or its Parent from time to time, including, without limitation and subject to the control and direction of the Board and the Chairman, planning and directing all aspects of the Company’s operational policies, objectives and initiatives, as well as attaining the Company’s short- and long-term financial and operational goals. The Executive will report to the Chairman.
 
(b) Performance of Duties.

(i)  Subject to the provisions hereof, the Executive agrees to serve the Company faithfully and to the best of his ability and to devote his full time, attention and efforts to the business and affairs of the Company during Executive’s employment by the Company.
 


Employment Agreement
Page 2

(ii) Executive represents and acknowledges that he is not subject to any obligations to any other company which would preclude the Executive from entering into this Agreement (including without limitation, any agreements (oral or written) with any former employer) nor are there any such obligations which would impact or restrict the Executive’s ability to fully carry out his responsibilities under this Agreement.

(iii) Executive agrees that he will not bring with him or use on behalf, or for the benefit, of the Company or disclose to the Company any confidential information of or concerning his former employer or any third party that is not generally available to the public or that has not been lawfully transferred to the Company.
 
4. Compensation.

(a) Base Salary. The Company shall pay to the Executive an annual base salary (the "Base Salary") of Two Hundred Fifty Thousand Dollars ($250,000) per year inclusive of taxes (which will be paid by the Executive directly), which Base Salary shall be paid in accordance with the Company's normal payroll procedures for its senior management. The compensation payable to Executive during each fiscal year beginning after the Effective Date shall be established by the Board or the Compensation Committee thereof following an annual performance review, but in no event shall the annual Base Salary for any subsequent year of the Term be less than the Base Salary in effect during the prior year of the Term. Notwithstanding the foregoing, the Base Salary shall accrue and not be paid in cash until the closing of any Qualified Offering and thereafter, shall be paid as set forth herein.

(b) Annual Bonus. Commencing with the fiscal year ending December 31,2007, Executive shall be entitled to participate in the Company's bonus plan for management and any successor bonus plan covering management (the "Bonus Plan"). Under the Bonus Plan, the Executive shall be eligible to receive a performance-based cash bonus for each year of employment in an amount, and based on individual and/or corporate objectives, targets and factors (and evaluation as to the extent of achievement thereof), to be established and determined by the Board in its sole discretion following consultation between the Board and Executive prior to, or within sixty (60) days after the commencement of, each fiscal year (the "Performance Criteria").

(c) Participation in Benefit Plans; Indemnification. While he is employed by the Company, Executive shall also be eligible to participate in any incentive and employee benefit plans or programs which may be offered by the Company to the extent that Executive meets the requirements for each individual plan and in all other plans in which Company executives participate. The Company provides no assurance as to the adoption or continuance of any particular employee benefit plan or program, and Executive's participation in any such plan or program shall be subject to the provisions, rules and regulations applicable thereto. The Company will offer medical insurance to its employees following consummation of the Merger and Financing, which will be available to the Executive on the same terms as is offered to other senior executives of the Company. In addition, the Company will provide officer liability insurance, subject to availability, on the same terms as is offered to other officers and directors of the Company. The Company shall indemnify Executive and hold him harmless from and against any claim, liability and expense (including, without limitation, reasonable attorney fees) made against or incurred by him in connection with his employment by the Company or his membership on the Board, in a manner and to an extent that is not less favorable to the Executive as the indemnification protection that is afforded by the Company to any other senior officer or director and that is consistent with industry custom and standards.
 


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(d) Expenses. The Company will pay or reimburse Executive for all reasonable and necessary out-of-pocket expenses incurred by him in the performance of Executive’s duties under this Agreement, subject to the Company's normal policies for expense verification. Notwithstanding the foregoing provisions and in recognition of the fact that Executive will live and travel away from his family for significant periods of time, Executive shall be authorized to expense up to $10,000 in personal travel expenses to the Company for which Executive will be responsible to pay the taxes, if any.
 
(e) Vacation. Executive shall be entitled to vacations in accordance with the policy of the Company with respect to its senior management, in effect from time to time, but will not be less than 24 vacation days per year.

5. Confidentiality and Insider Trading.

(a) (i) Executive acknowledges that, by reason of his employment by the Company, he will have access to confidential information of the Company and its parent, including, but not limited to, information and knowledge pertaining to inventions, discoveries, improvements, innovations, designs, ideas, trade secrets, proprietary information, advertising, marketing, distribution and sales methods, sales and profit figures, customer and vendor lists and relationships between the Company and sales representatives, wholesalers, customers, suppliers, dealers, distributors and others who have business dealings with them ("Confidential Information"). The Executive acknowledges that such Confidential Information is a valuable and unique asset of the Company and covenants that, both during and after the Term, Executive will not disclose any Confidential Information to any person or entity, nor use the Confidential Information for any purpose, except as his duties as an employee of the Company may require, without the prior written authorization of the Board. The obligation of confidentiality imposed by this Section 5(b) shall not apply to Confidential Information that otherwise becomes generally known to the public through no act of the Employee in breach of this Agreement or any other party in violation of an existing confidentiality agreement with the Company or which is required to be disclosed by court order or applicable law.

(ii) All records, business plans, financial statements and other Property delivered to or compiled by Executive for or on behalf of the Company or its vendors or customers that pertain to the business of the Company shall be and remain the property of the Company, and be subject at all times to its discretion and control. Likewise, all correspondence, reports, records and other similar data pertaining to the business, activities or future plans of the Company (and all copies thereof) that are collected by Executive shall be delivered promptly to the Company without request by it upon termination of Executive's employment.

(ii) Executive is aware that he will, as a result of his executive position with the company, come into contact with confidential information that, if disclosed would have an effect on the trading market for the Company’s parent’s securities. Executive agrees to only purchase or sell securities during times or “windows” wherein all material information is publicly available.
 


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(b) Nonsolicitation of Employees. During his employment or for 6 months thereafter, Executive shall not, directly or indirectly, personally or through others, encourage to leave employment with the Company, solicit for employment, or advise or recommend to any other person, firm, business, or entity that they employ or solicit for employment, any employee of the Company or of any parent, subsidiary, or affiliate of the Company.

6. Ventures. If, during the term of his employment, the Executive is engaged in or associated with the planning or implementing of any project, program, venture or relationship involving the Company and a third party or parties, all rights in such project shall belong to the Company. Except as approved by the Board, the Executive shall not be entitled to any interest in such project or to any commission, finder's fee or other compensation in connection therewith other than the compensation to be paid to the Executive as provided in this Agreement.

7. Acknowledgment. Executive agrees that the covenants and agreements contained in Section 5 hereof are material to this Agreement; that each of such covenants is reasonable and necessary to protect and preserve the Company's interests, properties and business; that irreparable loss and damage will be suffered by the Company should Executive breach any of such provisions; that each of such provisions is separate, distinct and severable not only from the other of such provisions but also from the other and remaining provisions of this Agreement; that the unenforceability or breach of any such provisions shall not affect the validity or enforceability of any other such provisions or any other provision of this Agreement; and that, in addition to other remedies available to it, the Company shall be entitled to both temporary and permanent injunctions and any other rights or remedies it may have, at law or in equity, to end or prevent a breach or contemplated breach by Executive of any such covenants or agreements.

8. Termination of Employment.

(a) Grounds for Termination. Executive's employment pursuant to this Agreement shall terminate prior to the expiration of the Term in the event that at any time:

(i) Executive dies,

(ii) Executive becomes disabled (as defined below), so that he cannot perform the essential functions of his position with or without reasonable accommodation,

(iii) The Board elects to terminate Executive's employment for "Cause" and notifies Executive in writing of such election, or

(iv) The Board elects to terminate Executive's employment without "Cause" and notifies Executive in writing of such election.

If Executive's employment is terminated pursuant to clause (i), (ii) or (iii) of this Section 8(a), such termination shall be effective immediately. If Executive's employment is terminated pursuant to subsection (iv) of this Section 8(a), such termination shall be effective 30 days after delivery of the notice of termination.

(b) "Cause" Defined. "Cause" shall mean (i) the willful engaging by Executive in illegal conduct or gross misconduct, (ii) Executive's material failure to continuously perform his obligations to the Company hereunder (other than any such failure resulting from illness or incapacity), or (iii) Executive's material breach of his obligations under this Agreement. For purposes of this Section 8(b), no act or failure to act on Executive's part shall be deemed "willful" unless done, or omitted to be done, by Executive not in good faith and without reasonable belief that Executive's action of omission was in the best interest of the Company.
 


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(c) "Disabled" Defined. As used in this Agreement, the term "disabled" means any mental or physical condition that renders Executive unable to perform the essential functions of his position, with or without reasonable accommodation, for a period in excess of 180 days.

(d) Surrender of Records and Property. Upon termination of his employment with the Company, Executive shall deliver promptly to the Company all documents or other materials, in any form, that relate in any way to the business, products, practices or techniques of the Company, and all other property, trade secrets and confidential information of the Company, including, but not limited to, all documents that in whole or in part contain any trade secrets or confidential information of the Company, which are in his possession or under his control.

 9. Effect of Termination.

(a) Termination Without Cause. In the event the Company terminates Executive's employment as the Company's Chairman and President without Cause pursuant to Section 8(a)(iv) hereof, Executive shall receive (1) a lump sum cash payment equal to the sum of (1) any Base Salary payable (including any accrued but unpaid Base Salary) through the date of termination and any Earned Bonus which remains unpaid as of the date of termination; and (2) an amount equal to 75% of the Executive's Base Salary in effect at the time of his termination for six months payable over such six month period.

(b) Termination For Cause. In the event the Company terminates Executive's employment as the Company's Chairman and President for Cause pursuant to Section 8(a)(iii) hereof, Executive shall be entitled to receive payment of any Base Salary (including any accrued but unpaid Base Salary) payable through the date of termination and any Earned Bonus which remains unpaid as of the date of termination.

(c) Voluntary Resignation. In the event Executive voluntarily terminates his employment as the Company's Chairman and President, Executive shall be entitled to receive payment of any Base Salary payable through the date of termination (including any accrued and unpaid Base Salary) and any Earned Bonus which remains unpaid as of the date of termination.

(d) Termination upon Executive’s Death or Disability. Upon Termination of Executive’s employment due to Executive’s death pursuant to 8(a)(i) hereof or Disability pursuant or 8(a)(ii) hereof, Executive shall receive a lump sum cash payment equal to the sum of (1) any Base Salary payable through the date of termination (including any accrued and unpaid Base Salary) and any Earned Bonus which remains unpaid as of the date of termination; and (2) an amount equal to 75% of the Executive's Base Salary in effect at the time of his termination.

(e) Termination Prior to Qualified Offering. In the event that Executive is terminated for any reason prior to the closing of a Qualified Offering, then all unpaid and accrued Base Salary payable upon such termination shall only be paid if, as and when the closing of a Qualified Offering occurs.
 


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10. Miscellaneous.

(a) Entire Agreement. This Agreement (including any exhibits, schedules and other documents referred to herein) contains the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes any prior understandings, agreements or representations, written or oral, relating to the subject matter hereof.

(b) Counterparts. This Agreement may be executed in separate counterparts, each of which will be an original and all of which taken together shall constitute one and the same agreement, and any party hereto may execute this Agreement by signing any such counterpart.

(c) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law but if any provision of this Agreement is held to be invalid, illegal or unenforceable under any applicable law or rule, the validity, legality and enforceability of the other provision of this Agreement will not be affected or impaired thereby.

(d) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives and, to the extent permitted by subsection (e), successors and assigns. The Company will require its successors to expressly assume its obligations under this Agreement.

(e) Assignability. Except as provided in Section 3(a) hereof, neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable (including by operation of law) by either party without the prior written consent of the other party to this Agreement, except that the Company may, without the consent of the Executive, assign its rights and obligations under this Agreement to any corporation, firm or other business entity with or into which the Company may merge or consolidate, or to which the Company may sell or transfer all or substantially all of its assets, or of which 50% or more of the equity investment and of the voting control is owned, directly or indirectly, by, or is under common ownership with, the Company. After any such assignment by the Company, and provided that such assignment arises by operation of law or involves an express written assumption by the assignee, the Company shall be immediately released and discharged from all further liability hereunder and such assignee shall thereafter be deemed to be the Company for the purposes of all provisions of this Agreement.

(f) Modification, Amendment, Waiver or Termination. No provision of this Agreement may be modified, amended, waived or terminated except by an instrument in writing signed by the parties to this Agreement. No course of dealing between the parties will modify, amend, waive or terminate any provision of this Agreement or any rights or obligations of any party under or by reason of this Agreement. No delay on the part of the Company in exercising any right hereunder shall operate as a waiver of such right. No waiver, express or implied, by the Company of any right or any breach by Executive shall constitute a waiver of any other right or breach by Executive.
 


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(g) Notices. All notices, consents, requests, instructions, approvals or other communications provided for herein shall be in writing and delivered by personal delivery, overnight courier, mail, electronic facsimile or e-mail addressed to the receiving party at the address set forth herein. All such communications shall be effective when received.

Address for the Executive:

 
Clive Ng
  c/o China Broadband, Ltd.
  1900 Ninth Street, 3rd Floor
  Boulder, CO 80302
  Attention: Clive Ng or President
 
Address for the Company:
 
  c/o China Broadband, Ltd.
  1900 Ninth Street, 3rd Floor
  Boulder, CO 80302
  Attention: Clive Ng or President
   
  With a copy to:
   
  Hodgson Russ, LLP
  60 East 42nd Street, 37th Floor
  New York 10017
  (212) 661-3535
  Attention: Ronniel S. Levy, Esq.

Any party may change the address set forth above by notice to each other party given as provided herein.

(h) Headings. The headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

(i) Governing Law - WAIVER of Jury Trial. ALL MATTERS RELATING TO THE INTERPRETATION, CONSTRUCTION, VALIDITY AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW PROVISIONS THEREOF. THE PARTIES HERETO EXPLICITLY WAIVE A JURY TRIAL OF ANY KIND AND SUBMIT TO ARBITRATION AS SET FORTH BELOW.

(j) Resolution of Certain Claims - Injunctive Relief. The Executive acknowledges that any breach by him of the provisions of this Agreement would cause irreparable injury to the Company and that money damages would not be a sufficient remedy for any such breach. Consequently, the Company shall be entitled to such equitable relief as may be determined by a court as a remedy for any such breach. Such remedy shall be in addition to all other remedies available at law or equity to the Company.



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(k) Arbitration. Except as otherwise specifically provided for hereunder, any claim or controversy arising out of or relating to this Agreement or the breach hereof shall be settled by arbitration in accordance with the laws of the State of New York. Such arbitration shall be conducted in the State and City of New York in accordance with the rules then existing of the American Arbitration Association which pertain to employment disputes. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. In the event of any dispute arising under this Agreement, the respective parties shall be responsible for the payment of their own legal fees and disbursements.

(l) Board Approval. On or prior to the Effective Date, the Company shall provide Executive with a copy of the duly adopted resolutions of the Managers of 8 Holdings approving the terms of this Agreement, electing the Executive to the position of acting President of Metaphor effective as of the Effective Date.

(m) Third-Party Benefit. Nothing in this Agreement, express or implied, is intended to confer upon any other person any rights, remedies, obligations or liabilities of any nature whatsoever.

(n) Withholding Taxes. The Company may withhold from any benefits payable under this Agreement all federal, state, city or other taxes (including any taxes required to be withheld under the rules of any foreign government whose tax provisions apply, as shall be required pursuant to any law or governmental regulation or ruling.

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the Effective Date.

China Broadband Ltd.
       
       
By:      

Name:
   
Title:      

EXECUTIVE
       
       

Clive Ng
   


EX-10.7 10 v068824_ex10-7.htm Unassociated Document
EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this "Agreement") dated as of February 18, 2007 (the "Effective Date"), between China Broadband Ltd., (the "Company"), and Jiang Bing (the "Executive"), a resident of Jinan, PRC.

WHEREAS, the Company wishes to employ the Executive to render services for the Company or its subsidiary and related entities on the terms and conditions set forth in this Agreement, and the Executive wishes to be retained and employed by the Company on such terms and conditions;

NOW, THEREFORE, in consideration of the premises, the mutual agreements set forth below and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1. Employment. The Company hereby employs the Executive, and the Executive accepts such employment and agrees to perform services for the Company, for the period and upon the other terms and conditions set forth in this Agreement.

2. Term. The term of the Executive's employment hereunder shall commence on the Effective date, and unless terminated at an earlier date in accordance with Section 8 hereof, shall extend through July 7, 2009 (the "Term"), unless extended by the parties in writing.
 
3. Position and Duties.

(a) Service with Company. During the term of the Executive's employment, the Executive shall serve in the position of Vice Chairman of the Company, and Executive shall have the authority, duties and responsibilities generally associated with such position and as may be determined by the Chairman (“Chairman”) or the Board of Directors (the “Board”) of the Company or its parent from time to time, including, without limitation and subject to the control and direction of the Board and the Chairman, planning and directing all aspects of the Company’s operational policies, objectives and initiatives, as well as attaining the Company’s short- and long-term financial and operational goals. The Executive will report to the Chairman.
 
(b) Performance of Duties.

(i)  Subject to the provisions hereof, the Executive agrees to serve the Company faithfully and to the best of his ability and to devote his full time, attention and efforts to the business and affairs of the Company during Executive’s employment by the Company.

(ii) Executive represents and acknowledges that he is not subject to any obligations to any other company which would preclude the Executive from entering into this Agreement (including without limitation, any agreements (oral or written) with any former employer) nor are there any such obligations which would impact or restrict the Executive’s ability to fully carry out his responsibilities under this Agreement.
 


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(iii) Executive agrees that he will not bring with him or use on behalf, or for the benefit, of the Company or disclose to the Company any confidential information of or concerning his former employer or any third party that is not generally available to the public or that has not been lawfully transferred to the Company.

 
4. Compensation.

(a) Base Salary. The Company shall pay to the Executive an annual base salary (the "Base Salary") of One Hundred and Twenty Thousand Dollars ($120,000) per year inclusive of taxes (which will be paid by the Executive directly), which Base Salary shall be paid in accordance with the Company's normal payroll procedures for its senior management. The compensation payable to Executive during each fiscal year beginning after the Effective Date shall be established by the Board or the Compensation Committee thereof following an annual performance review, but in no event shall the annual Base Salary for any subsequent year of the Term be less than the Base Salary in effect during the prior year of the Term.

(b) Annual Bonus. Commencing with the fiscal year ending December 31,2007, Executive shall be entitled to participate in the Company's bonus plan for management and any successor bonus plan covering management (the "Bonus Plan"). Under the Bonus Plan, the Executive shall be eligible to receive a performance-based cash bonus for each year of employment in an amount, and based on individual and/or corporate objectives, targets and factors (and evaluation as to the extent of achievement thereof), to be established and determined by the Board in its discretion following consultation between the Board and Executive prior to, or within sixty (60) days after the commencement of, each fiscal year (the "Performance Criteria"). Under the Bonus Plan for Executive, the target cash bonus for each year shall equal 50% of the Base Salary.

(c) Participation in Benefit Plans; Indemnification. While he is employed by the Company, Executive shall also be eligible to participate in any incentive and employee benefit plans or programs which may be offered by the Company to the extent that Executive meets the requirements for each individual plan and in all other plans in which Company executives participate. The Company provides no assurance as to the adoption or continuance of any particular employee benefit plan or program, and Executive's participation in any such plan or program shall be subject to the provisions, rules and regulations applicable thereto. The Company will offer medical insurance to its employees following consummation of the Merger and Financing, which will be available to the Executive on the same terms as is offered to other senior executives of the Company. In addition, the Company will provide officer liability insurance, subject to availability, on the same terms as is offered to other officers and directors of the Company. The Company shall indemnify Executive and hold him harmless from and against any claim, liability and expense (including, without limitation, reasonable attorney fees) made against or incurred by him in connection with his employment by the Company or his membership on the Board, in a manner and to an extent that is not less favorable to the Executive as the indemnification protection that is afforded by the Company to any other senior officer or director and that is consistent with industry custom and standards.
 

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(d) Expenses. The Company will pay or reimburse Executive for all reasonable and necessary out-of-pocket expenses incurred by him in the performance of Executive’s duties under this Agreement, subject to the Company's normal policies for expense verification. Notwithstanding the foregoing provisions and in recognition of the fact that Executive will live and travel away from his family for significant periods of time, Executive shall be authorized to expense up to $10,000 in personal travel expenses to the Company for which Executive will be responsible to pay the taxes, if any.
 
(e) Vacation. Executive shall be entitled to vacations in accordance with the policy of the Company with respect to its senior management, in effect from time to time, but will not be less than 24 vacation days per year.

5. Confidentiality and Insider Trading.

(a)   (i) Executive acknowledges that, by reason of his employment by the Company, he will have access to confidential information of the Company, including, but not limited to, information and knowledge pertaining to inventions, discoveries, improvements, innovations, designs, ideas, trade secrets, proprietary information, advertising, marketing, distribution and sales methods, sales and profit figures, customer and vendor lists and relationships between the Company and sales representatives, wholesalers, customers, suppliers, dealers, distributors and others who have business dealings with them ("Confidential Information"). The Executive acknowledges that such Confidential Information is a valuable and unique asset of the Company and covenants that, both during and after the Term, Executive will not disclose any Confidential Information to any person or entity, nor use the Confidential Information for any purpose, except as his duties as an employee of the Company may require, without the prior written authorization of the Board. The obligation of confidentiality imposed by this Section 5(b) shall not apply to Confidential Information that otherwise becomes generally known to the public through no act of the Employee in breach of this Agreement or any other party in violation of an existing confidentiality agreement with the Company or which is required to be disclosed by court order or applicable law.

(ii) All records, business plans, financial statements and other Property delivered to or compiled by Executive for or on behalf of the Company or its vendors or customers that pertain to the business of the Company shall be and remain the property of the Company, and be subject at all times to its discretion and control. Likewise, all correspondence, reports, records and other similar data pertaining to the business, activities or future plans of the Company (and all copies thereof) that are collected by Executive shall be delivered promptly to the Company without request by it upon termination of Executive's employment.
 
(ii) Executive is aware that he will, as a result of his executive position with the company, come into contact with confidential information that, if disclosed would have an effect on the trading market for the Company’s parent’s securities. Executive agrees to only purchase or sell securities during times or “windows” wherein all material information is publicly available.
 

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(b) Nonsolicitation of Employees. During his employment or for 6 months thereafter, Executive shall not, directly or indirectly, personally or through others, encourage to leave employment with the Company, solicit for employment, or advise or recommend to any other person, firm, business, or entity that they employ or solicit for employment, any employee of the Company or of any parent, subsidiary, or affiliate of the Company.

6. Ventures. If, during the term of his employment, the Executive is engaged in or associated with the planning or implementing of any project, program, venture or relationship involving the Company and a third party or parties, all rights in such project shall belong to the Company. Except as approved by the Board, the Executive shall not be entitled to any interest in such project or to any commission, finder's fee or other compensation in connection therewith other than the compensation to be paid to the Executive as provided in this Agreement.

7. Acknowledgment. Executive agrees that the covenants and agreements contained in Section 5 hereof are material to this Agreement; that each of such covenants is reasonable and necessary to protect and preserve the Company's interests, properties and business; that irreparable loss and damage will be suffered by the Company should Executive breach any of such provisions; that each of such provisions is separate, distinct and severable not only from the other of such provisions but also from the other and remaining provisions of this Agreement; that the unenforceability or breach of any such provisions shall not affect the validity or enforceability of any other such provisions or any other provision of this Agreement; and that, in addition to other remedies available to it, the Company shall be entitled to both temporary and permanent injunctions and any other rights or remedies it may have, at law or in equity, to end or prevent a breach or contemplated breach by Executive of any such covenants or agreements.

8. Termination of Employment.

(a) Grounds for Termination. Executive's employment pursuant to this Agreement shall terminate prior to the expiration of the Term in the event that at any time:

(i) Executive dies,

(ii) Executive becomes disabled (as defined below), so that he cannot perform the essential functions of his position with or without reasonable accommodation,

(iii) The Board elects to terminate Executive's employment for "Cause" and notifies Executive in writing of such election, or

(iv) The Board elects to terminate Executive's employment without "Cause" and notifies Executive in writing of such election.
 

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If Executive's employment is terminated pursuant to clause (i), (ii) or (iii) of this Section 8(a), such termination shall be effective immediately. If Executive's employment is terminated pursuant to subsection (iv) of this Section 8(a), such termination shall be effective 30 days after delivery of the notice of termination.

(b) "Cause" Defined. "Cause" shall mean (i) the willful engaging by Executive in illegal conduct or gross misconduct, (ii) Executive's material failure to continuously perform his obligations to the Company hereunder (other than any such failure resulting from illness or incapacity), or (iii) Executive's material breach of his obligations under this Agreement. For purposes of this Section 8(b), no act or failure to act on Executive's part shall be deemed "willful" unless done, or omitted to be done, by Executive not in good faith and without reasonable belief that Executive's action of omission was in the best interest of the Company.

(c) "Disabled" Defined. As used in this Agreement, the term "disabled" means any mental or physical condition that renders Executive unable to perform the essential functions of his position, with or without reasonable accommodation, for a period in excess of 180 days.

(d) Surrender of Records and Property. Upon termination of his employment with the Company, Executive shall deliver promptly to the Company all documents or other materials, in any form, that relate in any way to the business, products, practices or techniques of the Company, and all other property, trade secrets and confidential information of the Company, including, but not limited to, all documents that in whole or in part contain any trade secrets or confidential information of the Company, which are in his possession or under his control.

 9. Effect of Termination.

(a) Termination Without Cause.

In the event the Company terminates Executive's employment as the Company's Chief Operating Officer without Cause pursuant to Section 8(a)(iv) hereof,

(i) Executive shall receive (1) a lump sum cash payment equal to the sum of (1) any Base Salary payable through the date of termination and any Earned Bonus which remains unpaid as of the date of termination; and (2) an amount equal to 75% of the Executive's Base Salary in effect at the time of his termination for six months payable over such six month period;

(ii) to the extent the Option granted to Executive pursuant to Section 4(e) hereof has not vested at the time of such termination, the unvested portion of the Option will continue to vest on the vesting schedule described in Section 4(e) and will remain exercisable until its expiration date; and
 

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(iii) to the extent the Option granted to Executive pursuant to Section 4(e) hereof has vested prior to the date of Executive’s termination, such vested portion of the Option will remain exercisable until its expiration date.

(b) Termination For Cause. In the event the Company terminates Executive's employment as the Company's Chief Operating Officer for Cause pursuant to Section 8(a)(iii) hereof, (i) Executive shall be entitled to receive payment of any Base Salary payable through the date of termination and any Earned Bonus which remains unpaid as of the date of termination, (ii) to the extent the Option granted to Executive pursuant to Section 4(e) hereof has vested prior to the date of Executive's termination, such vested portion of the Option shall remain exercisable for a period of six months following Executive's termination, and (iii) to the extent the Option granted to Executive pursuant to Section 4(e) hereof has not vested at the time of such termination the unvested portion of the Option will terminate.

(c) Voluntary Resignation. In the event Executive voluntarily terminates his employment as the Company's Chief Operating Officer, (i) Executive shall be entitled to receive payment of any Base Salary payable through the date of termination and any Earned Bonus which remains unpaid as of the date of termination, (ii) to the extent the Option granted to Executive pursuant to Section 4(e) hereof has vested prior to the date of Executive's termination, such vested portion of the Option shall remain exercisable for a period of twelve months following Executive's termination, and (iii) to the extent the Option granted to Executive pursuant to Section 4(e) hereof has not vested at the time of such termination the unvested portion of the Option will terminate.

(d) Termination upon Executive’s Death or Disability.

Upon Termination of Executive’s employment due to Executive’s death pursuant to 8(a)(i) hereof or Disability pursuant or 8(a)(ii) hereof,

(i) Executive shall receive a lump sum cash payment equal to the sum of (1) any Base Salary payable through the date of termination and any Earned Bonus which remains unpaid as of the date of termination; and (2) an amount equal to 75% of the Executive's Base Salary in effect at the time of his termination;

(ii) to the extent the Option granted to Executive pursuant to Section 4(e) hereof has not vested at the time of such termination, the unvested portion of the Option will vest and become immediately exercisable, and the entire Option will continue to be exercisable until the expiration date thereof; and

(iii) to the extent the Option granted to Executive pursuant to Section 4(e) hereof has vested prior to the date of Executive’s termination, such vested portion of the Option will remain exercisable until its expiration date.

 10. Miscellaneous.

(a) Entire Agreement. This Agreement (including any exhibits, schedules and other documents referred to herein) contains the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes any prior understandings, agreements or representations, written or oral, relating to the subject matter hereof.
 

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(b) Counterparts. This Agreement may be executed in separate counterparts, each of which will be an original and all of which taken together shall constitute one and the same agreement, and any party hereto may execute this Agreement by signing any such counterpart.

(c) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law but if any provision of this Agreement is held to be invalid, illegal or unenforceable under any applicable law or rule, the validity, legality and enforceability of the other provision of this Agreement will not be affected or impaired thereby.

(d) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives and, to the extent permitted by subsection (e), successors and assigns. The Company will require its successors to expressly assume its obligations under this Agreement.

(e) Assignability. Except as provided in Section 3(a) hereof, neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable (including by operation of law) by either party without the prior written consent of the other party to this Agreement, except that the Company may, without the consent of the Executive, assign its rights and obligations under this Agreement to any corporation, firm or other business entity with or into which the Company may merge or consolidate, or to which the Company may sell or transfer all or substantially all of its assets, or of which 50% or more of the equity investment and of the voting control is owned, directly or indirectly, by, or is under common ownership with, the Company. After any such assignment by the Company, and provided that such assignment arises by operation of law or involves an express written assumption by the assignee, the Company shall be immediately released and discharged from all further liability hereunder and such assignee shall thereafter be deemed to be the Company for the purposes of all provisions of this Agreement.

(f) Modification, Amendment, Waiver or Termination. No provision of this Agreement may be modified, amended, waived or terminated except by an instrument in writing signed by the parties to this Agreement. No course of dealing between the parties will modify, amend, waive or terminate any provision of this Agreement or any rights or obligations of any party under or by reason of this Agreement. No delay on the part of the Company in exercising any right hereunder shall operate as a waiver of such right. No waiver, express or implied, by the Company of any right or any breach by Executive shall constitute a waiver of any other right or breach by Executive.

(g) Notices. All notices, consents, requests, instructions, approvals or other communications provided for herein shall be in writing and delivered by personal delivery, overnight courier, mail, electronic facsimile or e-mail addressed to the receiving party at the address set forth herein. All such communications shall be effective when received.
 

Employment Agreement
Page 8

Address for the Executive:

Jiang, Bing
No.32, Jing Shi Yi Road
Jinan, Shandong 250014
China

Address for the Company:

1900 Ninth Street, 3rd Floor
Boulder, CO 80302
Attention: Clive Ng or President
 
With a copy to:
 
Hodgson Russ, LLP
60 East 42nd Street, 37th Floor
New York 10017
(212) 661-3535
Attention: Ronniel S. Levy, Esq.

Any party may change the address set forth above by notice to each other party given as provided herein.

(h) Headings. The headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

(i) Governing Law. ALL MATTERS RELATING TO THE INTERPRETATION, CONSTRUCTION, VALIDITY AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW PROVISIONS THEREOF.

(j) Resolution of Certain Claims - Injunctive Relief. The Executive acknowledges that any breach by him of the provisions of this Agreement would cause irreparable injury to the Company and that money damages would not be a sufficient remedy for any such breach. Consequently, the Company shall be entitled to such equitable relief as may be determined by a court as a remedy for any such breach. Such remedy shall be in addition to all other remedies available at law or equity to the Company.

(k) Arbitration. Except as otherwise specifically provided for hereunder, any claim or controversy arising out of or relating to this Agreement or the breach hereof shall be settled by arbitration in accordance with the laws of the State of New York. Such arbitration shall be conducted in the State and City of New York in accordance with the rules then existing of the American Arbitration Association which pertain to employment disputes. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. In the event of any dispute arising under this Agreement, the respective parties shall be responsible for the payment of their own legal fees and disbursements.
 

Employment Agreement
Page 9

(l) Board Approval. On or prior to the Effective Date, the Company shall provide Executive with a copy of the duly adopted resolutions of the Managers of 8 Holdings approving the terms of this Agreement, electing the Executive to the position of acting President of Metaphor effective as of the Effective Date.

(m) Third-Party Benefit. Nothing in this Agreement, express or implied, is intended to confer upon any other person any rights, remedies, obligations or liabilities of any nature whatsoever.

(n) Withholding Taxes. The Company may withhold from any benefits payable under this Agreement all federal, state, city or other taxes (including any taxes required to be withheld under the rules of any foreign government whose tax provisions apply, as shall be required pursuant to any law or governmental regulation or ruling.
 
IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the Effective Date.
 
China Broadband Ltd.

By:_____________________________    
Name:
Title:


EXECUTIVE
___________________________
Jiang Bing
 

EX-10.8 11 v068824_ex10-8.htm
EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this "Agreement") dated as of February 24, 2007 (the "Effective Date"), between China Broadband, Ltd., a Cayman Islands company (the "Company"), and Yue Pu (the "Executive"), a residing at Apartment 2001, Bld. 2 , No. 1 Xiangheyman Road, Dongcheng District, Beijing, China 100028.

WHEREAS, the Company wishes to employ the Executive to render services for the Company or its subsidiary and related entities on the terms and conditions set forth in this Agreement, and the Executive wishes to be retained and employed by the Company on such terms and conditions;

WHEREAS, the Company is the wholly owned subsidiary of Alpha Nutra, Incl, d/b/a China Broadband, a Nevada corporation (the “Parent”);

NOW, THEREFORE, in consideration of the premises, the mutual agreements set forth below and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1. Employment. The Company hereby employs the Executive, and the Executive accepts such employment and agrees to perform services for the Company, for the period and upon the other terms and conditions set forth in this Agreement.
 
2. Term. The term of the Executive's employment hereunder shall commence on the Effective date, and unless terminated at an earlier date in accordance with Section 8 hereof, shall extend through July 7, 2009 (the "Term"), unless extended by the parties in writing. Notwithstanding the foregoing, all Base Salary compensation only shall accrue and be paid until the closing of a financing with gross proceeds of $5,000,000 in one or more closings (a “Qualified Offering”). All other compensation and rights shall accrue from the date hereof and onward.
 
3. Position and Duties.

(a) Service with Company. During the term of the Executive's employment, the Executive shall serve in the position of Chief Executive Officer of the Company, and Executive shall have the authority, duties and responsibilities generally associated with such position and as may be determined by the Chairman (“Chairman”) or the Board of Directors (the “Board”) of the Company or its parent from time to time, including, without limitation and subject to the control and direction of the Board and the Chairman, planning and directing all aspects of the Company’s operational policies, objectives and initiatives, as well as attaining the Company’s short- and long-term financial and operational goals. The Executive will report to the Chairman.
 
(b) Performance of Duties.

(i)  Subject to the provisions hereof, the Executive agrees to serve the Company faithfully and to the best of his ability and to devote his full time, attention and efforts to the business and affairs of the Company during Executive’s employment by the Company.
 
 
 

 

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(ii) Executive represents and acknowledges that he is not subject to any obligations to any other company which would preclude the Executive from entering into this Agreement (including without limitation, any agreements (oral or written) with any former employer) nor are there any such obligations which would impact or restrict the Executive’s ability to fully carry out his responsibilities under this Agreement.

(iii) Executive agrees that he will not bring with him or use on behalf, or for the benefit, of the Company or disclose to the Company any confidential information of or concerning his former employer or any third party that is not generally available to the public or that has not been lawfully transferred to the Company.
 
4. Compensation.

(a) Base Salary. The Company shall pay to the Executive an annual base salary (the "Base Salary") of One Hundred and Twenty Thousand Dollars ($120,000) per year inclusive of taxes (which will be paid by the Executive directly), which Base Salary shall be paid in accordance with the Company's normal payroll procedures for its senior management. The compensation payable to Executive during each fiscal year beginning after the Effective Date shall be established by the Board or the Compensation Committee thereof following an annual performance review, but in no event shall the annual Base Salary for any subsequent year of the Term be less than the Base Salary in effect during the prior year of the Term. Notwithstanding the foregoing, the Base Salary shall accrue and not be paid in cash until the closing of any Qualified Offering and thereafter, shall be paid as set forth herein.

(b) Annual Bonus. Commencing with the fiscal year ending December 31,2007, Executive shall be entitled to participate in the Company's bonus plan for management and any successor bonus plan covering management (the "Bonus Plan"). Under the Bonus Plan, the Executive shall be eligible to receive a performance-based cash bonus for each year of employment in an amount, and based on individual and/or corporate objectives, targets and factors (and evaluation as to the extent of achievement thereof), to be established and determined by the Board in its sole discretion following consultation between the Board and Executive prior to, or within sixty (60) days after the commencement of, each fiscal year (the "Performance Criteria").

(c) Participation in Benefit Plans; Indemnification. While he is employed by the Company, Executive shall also be eligible to participate in any incentive and employee benefit plans or programs which may be offered by the Company to the extent that Executive meets the requirements for each individual plan and in all other plans in which Company executives participate. The Company provides no assurance as to the adoption or continuance of any particular employee benefit plan or program, and Executive's participation in any such plan or program shall be subject to the provisions, rules and regulations applicable thereto. The Company will offer medical insurance to its employees following consummation of the Merger and Financing, which will be available to the Executive on the same terms as is offered to other senior executives of the Company. In addition, the Company will provide officer liability insurance, subject to availability, on the same terms as is offered to other officers and directors of the Company. The Company shall indemnify Executive and hold him harmless from and against any claim, liability and expense (including, without limitation, reasonable attorney fees) made against or incurred by him in connection with his employment by the Company or his membership on the Board, in a manner and to an extent that is not less favorable to the Executive as the indemnification protection that is afforded by the Company to any other senior officer or director and that is consistent with industry custom and standards.
 
 
 

 

Employment Agreement
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(d) Expenses. The Company will pay or reimburse Executive for all reasonable and necessary out-of-pocket expenses incurred by him in the performance of Executive’s duties under this Agreement, subject to the Company's normal policies for expense verification. Notwithstanding the foregoing provisions and in recognition of the fact that Executive will live and travel away from his family for significant periods of time, Executive shall be authorized to expense up to $10,000 in personal travel expenses to the Company for which Executive will be responsible to pay the taxes, if any.
 
(e) Vacation. Executive shall be entitled to vacations in accordance with the policy of the Company with respect to its senior management, in effect from time to time, but will not be less than 24 vacation days per year.

5. Confidentiality and Insider Trading.

(a) (i) Executive acknowledges that, by reason of his employment by the Company, he will have access to confidential information of the Company and its parent, including, but not limited to, information and knowledge pertaining to inventions, discoveries, improvements, innovations, designs, ideas, trade secrets, proprietary information, advertising, marketing, distribution and sales methods, sales and profit figures, customer and vendor lists and relationships between the Company and sales representatives, wholesalers, customers, suppliers, dealers, distributors and others who have business dealings with them ("Confidential Information"). The Executive acknowledges that such Confidential Information is a valuable and unique asset of the Company and covenants that, both during and after the Term, Executive will not disclose any Confidential Information to any person or entity, nor use the Confidential Information for any purpose, except as his duties as an employee of the Company may require, without the prior written authorization of the Board. The obligation of confidentiality imposed by this Section 5(b) shall not apply to Confidential Information that otherwise becomes generally known to the public through no act of the Employee in breach of this Agreement or any other party in violation of an existing confidentiality agreement with the Company or which is required to be disclosed by court order or applicable law.

(ii) All records, business plans, financial statements and other Property delivered to or compiled by Executive for or on behalf of the Company or its vendors or customers that pertain to the business of the Company shall be and remain the property of the Company, and be subject at all times to its discretion and control. Likewise, all correspondence, reports, records and other similar data pertaining to the business, activities or future plans of the Company (and all copies thereof) that are collected by Executive shall be delivered promptly to the Company without request by it upon termination of Executive's employment.

(ii) Executive is aware that he will, as a result of his executive position with the company, come into contact with confidential information that, if disclosed would have an effect on the trading market for the Company’s parent’s securities. Executive agrees to only purchase or sell securities during times or “windows” wherein all material information is publicly available.
 
 
 

 

Employment Agreement
Page 4
 
(b) Nonsolicitation of Employees. During his employment or for 6 months thereafter, Executive shall not, directly or indirectly, personally or through others, encourage to leave employment with the Company, solicit for employment, or advise or recommend to any other person, firm, business, or entity that they employ or solicit for employment, any employee of the Company or of any parent, subsidiary, or affiliate of the Company.

6. Ventures. If, during the term of his employment, the Executive is engaged in or associated with the planning or implementing of any project, program, venture or relationship involving the Company and a third party or parties, all rights in such project shall belong to the Company. Except as approved by the Board, the Executive shall not be entitled to any interest in such project or to any commission, finder's fee or other compensation in connection therewith other than the compensation to be paid to the Executive as provided in this Agreement.

7. Acknowledgment. Executive agrees that the covenants and agreements contained in Section 5 hereof are material to this Agreement; that each of such covenants is reasonable and necessary to protect and preserve the Company's interests, properties and business; that irreparable loss and damage will be suffered by the Company should Executive breach any of such provisions; that each of such provisions is separate, distinct and severable not only from the other of such provisions but also from the other and remaining provisions of this Agreement; that the unenforceability or breach of any such provisions shall not affect the validity or enforceability of any other such provisions or any other provision of this Agreement; and that, in addition to other remedies available to it, the Company shall be entitled to both temporary and permanent injunctions and any other rights or remedies it may have, at law or in equity, to end or prevent a breach or contemplated breach by Executive of any such covenants or agreements.

8. Termination of Employment.

(a) Grounds for Termination. Executive's employment pursuant to this Agreement shall terminate prior to the expiration of the Term in the event that at any time:

(i) Executive dies,

(ii) Executive becomes disabled (as defined below), so that he cannot perform the essential functions of his position with or without reasonable accommodation,

(iii) The Board elects to terminate Executive's employment for "Cause" and notifies Executive in writing of such election, or

(iv) The Board elects to terminate Executive's employment without "Cause" and notifies Executive in writing of such election.

If Executive's employment is terminated pursuant to clause (i), (ii) or (iii) of this Section 8(a), such termination shall be effective immediately. If Executive's employment is terminated pursuant to subsection (iv) of this Section 8(a), such termination shall be effective 30 days after delivery of the notice of termination.

(b) "Cause" Defined. "Cause" shall mean (i) the willful engaging by Executive in illegal conduct or gross misconduct, (ii) Executive's material failure to continuously perform his obligations to the Company hereunder (other than any such failure resulting from illness or incapacity), or (iii) Executive's material breach of his obligations under this Agreement. For purposes of this Section 8(b), no act or failure to act on Executive's part shall be deemed "willful" unless done, or omitted to be done, by Executive not in good faith and without reasonable belief that Executive's action of omission was in the best interest of the Company.
 
 
 

 

Employment Agreement
Page 5

(c) "Disabled" Defined. As used in this Agreement, the term "disabled" means any mental or physical condition that renders Executive unable to perform the essential functions of his position, with or without reasonable accommodation, for a period in excess of 180 days.

(d) Surrender of Records and Property. Upon termination of his employment with the Company, Executive shall deliver promptly to the Company all documents or other materials, in any form, that relate in any way to the business, products, practices or techniques of the Company, and all other property, trade secrets and confidential information of the Company, including, but not limited to, all documents that in whole or in part contain any trade secrets or confidential information of the Company, which are in his possession or under his control.

 9. Effect of Termination.

  (a) Termination Without Cause. In the event the Company terminates Executive's employment as the Company's Chief Executive Officer without Cause pursuant to Section 8(a)(iv) hereof, Executive shall receive (1) a lump sum cash payment equal to the sum of (1) any Base Salary payable (including any accrued but unpaid Base Salary) through the date of termination and any Earned Bonus which remains unpaid as of the date of termination; and (2) an amount equal to 75% of the Executive's Base Salary in effect at the time of his termination for six months payable over such six month period.

(b) Termination For Cause. In the event the Company terminates Executive's employment as the Company's Chief Executive Officer for Cause pursuant to Section 8(a)(iii) hereof, Executive shall be entitled to receive payment of any Base Salary (including any accrued but unpaid Base Salary) payable through the date of termination and any Earned Bonus which remains unpaid as of the date of termination.

(c) Voluntary Resignation. In the event Executive voluntarily terminates his employment as the Company's Chief Executive Officer, Executive shall be entitled to receive payment of any Base Salary payable through the date of termination (including any accrued and unpaid Base Salary) and any Earned Bonus which remains unpaid as of the date of termination.

(d) Termination upon Executive’s Death or Disability. Upon Termination of Executive’s employment due to Executive’s death pursuant to 8(a)(i) hereof or Disability pursuant or 8(a)(ii) hereof, Executive shall receive a lump sum cash payment equal to the sum of (1) any Base Salary payable through the date of termination (including any accrued and unpaid Base Salary) and any Earned Bonus which remains unpaid as of the date of termination; and (2) an amount equal to 75% of the Executive's Base Salary in effect at the time of his termination.

(e) Termination Prior to Qualified Offering. In the event that Executive is terminated for any reason prior to the closing of a Qualified Offering, then all unpaid and accrued Base Salary payable upon such termination shall only be paid if, as and when the closing of a Qualified Offering occurs.
 
 
 

 

Employment Agreement
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10. Miscellaneous.

(a) Entire Agreement. This Agreement (including any exhibits, schedules and other documents referred to herein) contains the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes any prior understandings, agreements or representations, written or oral, relating to the subject matter hereof.

(b) Counterparts. This Agreement may be executed in separate counterparts, each of which will be an original and all of which taken together shall constitute one and the same agreement, and any party hereto may execute this Agreement by signing any such counterpart.

(c) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law but if any provision of this Agreement is held to be invalid, illegal or unenforceable under any applicable law or rule, the validity, legality and enforceability of the other provision of this Agreement will not be affected or impaired thereby.

  (d) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives and, to the extent permitted by subsection (e), successors and assigns. The Company will require its successors to expressly assume its obligations under this Agreement.

(e) Assignability. Except as provided in Section 3(a) hereof, neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable (including by operation of law) by either party without the prior written consent of the other party to this Agreement, except that the Company may, without the consent of the Executive, assign its rights and obligations under this Agreement to any corporation, firm or other business entity with or into which the Company may merge or consolidate, or to which the Company may sell or transfer all or substantially all of its assets, or of which 50% or more of the equity investment and of the voting control is owned, directly or indirectly, by, or is under common ownership with, the Company. After any such assignment by the Company, and provided that such assignment arises by operation of law or involves an express written assumption by the assignee, the Company shall be immediately released and discharged from all further liability hereunder and such assignee shall thereafter be deemed to be the Company for the purposes of all provisions of this Agreement.

(f) Modification, Amendment, Waiver or Termination. No provision of this Agreement may be modified, amended, waived or terminated except by an instrument in writing signed by the parties to this Agreement. No course of dealing between the parties will modify, amend, waive or terminate any provision of this Agreement or any rights or obligations of any party under or by reason of this Agreement. No delay on the part of the Company in exercising any right hereunder shall operate as a waiver of such right. No waiver, express or implied, by the Company of any right or any breach by Executive shall constitute a waiver of any other right or breach by Executive.
 
 
 

 

Employment Agreement
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(g) Notices. All notices, consents, requests, instructions, approvals or other communications provided for herein shall be in writing and delivered by personal delivery, overnight courier, mail, electronic facsimile or e-mail addressed to the receiving party at the address set forth herein. All such communications shall be effective when received.

Address for the Executive:
 
 
Pu, Yue
  Apartment 2001, Bld. 2 ,
  No. 1 Xiangheyman Road, Dongcheng District,
  Beijing, China 100028
  
Address for the Company:

 
c/o China Broadband, Ltd.
  1900 Ninth Street, 3rd Floor
  Boulder, CO 80302
  Attention: Clive Ng or President
 
 
With a copy to:
   
  Hodgson Russ, LLP
  60 East 42nd Street, 37th Floor
  New York 10017
  (212) 661-3535
  Attention: Ronniel S. Levy, Esq.

Any party may change the address set forth above by notice to each other party given as provided herein.

(h) Headings. The headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

(i) Governing Law - WAIVER of Jury Trial. ALL MATTERS RELATING TO THE INTERPRETATION, CONSTRUCTION, VALIDITY AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW PROVISIONS THEREOF. THE PARTIES HERETO EXPLICITLY WAIVE A JURY TRIAL OF ANY KIND AND SUBMIT TO ARBITRATION AS SET FORTH BELOW.

(j) Resolution of Certain Claims - Injunctive Relief. The Executive acknowledges that any breach by him of the provisions of this Agreement would cause irreparable injury to the Company and that money damages would not be a sufficient remedy for any such breach. Consequently, the Company shall be entitled to such equitable relief as may be determined by a court as a remedy for any such breach. Such remedy shall be in addition to all other remedies available at law or equity to the Company.
 
 
 

 

Employment Agreement
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(k) Arbitration. Except as otherwise specifically provided for hereunder, any claim or controversy arising out of or relating to this Agreement or the breach hereof shall be settled by arbitration in accordance with the laws of the State of New York. Such arbitration shall be conducted in the State and City of New York in accordance with the rules then existing of the American Arbitration Association which pertain to employment disputes. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. In the event of any dispute arising under this Agreement, the respective parties shall be responsible for the payment of their own legal fees and disbursements.

(l) Board Approval. On or prior to the Effective Date, the Company shall provide Executive with a copy of the duly adopted resolutions of the Managers of 8 Holdings approving the terms of this Agreement, electing the Executive to the position of acting President of Metaphor effective as of the Effective Date.

(m) Third-Party Benefit. Nothing in this Agreement, express or implied, is intended to confer upon any other person any rights, remedies, obligations or liabilities of any nature whatsoever.

(n) Withholding Taxes. The Company may withhold from any benefits payable under this Agreement all federal, state, city or other taxes (including any taxes required to be withheld under the rules of any foreign government whose tax provisions apply, as shall be required pursuant to any law or governmental regulation or ruling.

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the Effective Date.
 
China Broadband Ltd.      
       
       
By:      

Name:
   
Title:      

EXECUTIVE      
       
       

Yue Pu
   

 
 

 
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