FILED: NEW YORK COUNTY CLERK 04/17/ :28 PM INDEX NO /2016 NYSCEF DOC. NO. 29 RECEIVED NYSCEF: 04/17/2017

Transcription

1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ARM INTERNET INVESTMENT I LIMITED Plaintiff, Index No /2016 -against- C MEDIA LIMITED and SONG XUESONG, Justice Robert R. Reed IA Part 43 Defendants. PLAINTIFF'S MEMORANDUM OF LAW IN SUPPORT OF ITS MOTION TO CONFIRM THE EX PARTE ORDER OF ATTACHMENT HOLLAND & KNIGHT 31 West 52 nd Street New York, New York Tel: (212) Fax:(212) Attorneys for Plaintiff ARM Internet Investment I Limited # vl 1 of 26

2 TABLE OF AUTHORITIES TABLE OF CONTENTS Page i PRELIMINARY STATEMENT 1 OVERVIEW 1 STATEMENT OF FACTS 3 A. Service of The Attachment Order 4 B. The Need To Confirm The Attachment Order 5 C. The Parties 8 D. Agreements Between ARM and C Media and Song and Defendants' Breach Of The Redemption Agreement 8 E. ARM's Motion For Summary Judgment And The Pleadings in this Action 9 F. Calculating the Hong Kong Judgment and the Current Amount Of The Attachment 10 ARGUMENT 11 POINT I THIS COURT SHOULD GRANT PLAINTIFF'S MOTION TO CONFIRM THE ATTACHMENT ORDER 11 A. ARM Has A Cause Of Action Under Article 53 And Has Shown A Probability Of Success On Such Cause of Action 12 B. ARM's Cause of Action Falls Within The Grounds for An Attachment Under CPLR C. The Amount Demanded Is In Excess Of All Counterclaims 17 D. Attachments Are Routinely Issued To Secure Payment Of A Foreign Money Judgment 17 E. Plaintiff Posted The Undertaking of $2,680, CONCLUSION 20 2 of 26

3 TABLE OF AUTHORITIES Page(s) Cases Abu Dhabi Commercial Bank PJSC v. Saad Trading, Contracting and Fin. Servs. Co., 117A.D.3d609(lstDep't2014) 13 Bond v. Lichenstein, 129 A.D.3d 535 (1st Dep't 2015) 14 CDR Creances, S.A. v. Euro-American Lodging Corp., 7 Misc. 3d 1019(A) (Supreme Court, New York Co., Mar. 16, 2005) 17 CISC Mellon Trust Co. v. Mora Hotel Corp., 100 N.Y.2d 215 (2003) 12, 16, 17 Citadel Management Inc. v. Hertzog, 182 Misc.2d 902 (Supreme Court, Queens Co. 1999, affd, 287 A.D.2d 533 (2d Dep't 2001) 3, 17 Considar, Inc. v. Redi Corp. Establishment, 238 A.D.2d 111 (1st Dep't 1997) 12 DLJ Mortg. Capital, Inc. v. Kontogiannis, 594 F. Supp. 2d 308 (E.D.N.Y. 2009) 12 Downs v. Huen, 298 A.D.2d 177 (1st Dep't 2002) 14 Harvardsky Prumyslovy Holding, A.S.-VLikvidaci v. Kozeny, 117 A.D.3d 77 (1st Dep't 2014) 3,17 Hotel 71 Mezz Lender LLC v. Folor, 14N.Y.3d303(2010) 1 Jannuzzo v. de Cuevas, 216 A.D.2d 37 (1st Dep't 1995) 17 John Galliano, S.A. v. Stallion, Inc., 15 N.Y.3d 75 (2010) 2, 13, 20 John Galliano, S.A. v. Stallion, Inc., 62 A.D.3d 415 (1st Dep't 2009) 15 S.C Chimexim S.A. v. Velco Enterprises Ltd., 36 F. Supp. 2d 206 (S.D.N.Y. 1999) 16, n.4 3 of 26

4 Sung Hwan Co., Ltd. v. Rite Aid Corp., 7N.Y.3d78(2006) l3 VCorp. Ltd. v. Redi Corp. (USA), 2004 WL (S.D.N.Y. Oct. 9, 2004) 3 j 17 Statutes CPLR ,8 CPLR CPLR 5201(b) 12 CPLR CPLR CPLR , 14 CPLR 5304(a) 16 CPLR 5304(a)(1) 2,14 CPLR 5304(a)(2) 2,14 CPLR 5304(b) 16, n.4 CPLR 5305(a)(2) 15 CPLR CPLR 6201(1) 16 CPLR 6201(3) 16 CPLR 6201(5) 3,16,18 CPLR CPLR 6211(b) 1,4 CPLR 6212(a) 1, 11, 17 CPLR 6212(b) 20,n.5 Other Authorities 3 N.Y. Prac. Com., Litigation in New York State Courts 18:41 (4th ed) of 26

5 Commentaries to CPLR 6201 (McKinney's) C6201:5 18 in 5 of 26

6 PRELIMINARY STATEMENT This memorandum of law is submitted on behalf of plaintiff ARM Internet Investment I Limited ("ARM" or "Plaintiff) in support of its motion, pursuant to CPLR 6211(b) and 6212(a), to confirm the Ex Parte Order of Attachment issued on April 5, 2017 in the amount of $26,301,678 (the "Attachment Order") attaching all tangible and intangible property and assets owned or beneficially owned by Defendants C Media Limited ("C Media") and Song Xuesong ("Song") (collectively "Defendants"), or in which C Media and Song have an interest that is located in New York, including, but not limited to, 5,714,285 shares of common stock owned by C Media in Wecast Network, Inc. ("Wecast"), formerly known as YOU On Demand Holdings, Inc. ("YOD"). OVERVIEW This action, which was commenced in November 2016, seeks recognition and enforcement, pursuant to Article 53 of the CPLR, of a final money judgment in the principal amount of $24.9 million, plus interest and court costs, issued on October 5,2016 by the High Court of the Hong Kong Special Administrative Region, Court of First Instance (the "High Court"), in ARM's favor and against Defendants C Media and Song in the High Court Action No. 791 of 2016 (the "Hong Kong Judgment"). The purpose of the requested order of attachment is to obtain security for the enforcement of the Hong Kong Judgment. One of the purposes of an "attachment is to provide security for a potential judgment against a nonresident debtor." Hotel 71 Mezz Lender LLC v. Folor, 14 N.Y.3d 303, 310 (2010). This purpose applies with even greater force where a "final, conclusive and enforceable" foreign money judgment has been rendered against a nonresident debtor and the plaintiff judgment creditor, under Article 53 "merely asks the court to perform its ministerial function of recognizing 6 of 26

7 the foreign country money judgment and converting it into a New York judgment." John Galliano, S.A. v. Stallion, Inc., 15 N.Y.3d 75, 81 (2010) (emphasis added). As shown below, ARM is entitled to an order confirming the Attachment Order under CPLR 6211(b) and 6212(a) because it has clearly satisfied the four conditions required for an attachment. First, ARM has a valid cause of action against Defendants based on the final, conclusive and enforceable Hong Kong Judgment. Second, ARM is likely to succeed on its cause of action to recognize and enforce the foreign money judgment under Article 53 of the CPLR. On March 22, 2017 ARM filed a motion for summary judgment, pursuant to CPLR 3212, 5302 and 5303, to recognize and enforce the Hong Kong Judgment. 1 This motion for summary judgment shows that ARM's Hong Kong Judgment fits squarely within the category of foreign country judgments enforceable under Article 53. It meets both of the threshold requirements set forth in Sections 5302 and 5303, namely, it grants "recovery of a sum of money" and is "final, conclusive and enforceable" in Hong Kong, the jurisdiction where it was rendered. ARM's summary judgment motion also demonstrates that none of the two mandatory grounds for non-recognition under CPLR 5304 apply. As required by CPLR 5304(a)(1), the Hong Kong Judgment was rendered under a system which provides impartial tribunals or procedures compatible with due process of law, as state and federal courts in New York have consistently acknowledged. Moreover, the Hong Kong court unquestionably had personal jurisdiction over defendants C Media and Song under CPLR 5304(a)(2) as they both expressly consented to the jurisdiction of the Hong Kong courts to hear disputes arising under the 1 Pursuant to a Stipulation, dated March 30, 2017, the return date of ARM's motion for summary judgment, at Defendants' counsel's request, was adjourned from April 7, 2017 to May 9, of 26

8 Redemption Agreement that was the subject of the Hong Kong Action, and they, represented by counsel, appeared in the action and vigorously defended the Hong Kong Action. Third, ARM's cause of action based on a "judgment which qualifies for recognition under the provisions of article 53" is a ground for attachment under CPLR 6201(5). Fourth, the amount that ARM demands from defendants exceeds all counterclaims known to ARM. Indeed, Defendants' Answer to the Complaint asserts no counterclaims. The New York courts have consistently granted attachments to secure the payment of a foreign money judgment. See Harvardsky Prumyslovy Holding, A.S.-V Likvidaci v. Kozeny, 117 A.D.3d 77, (1st Dep't 2014) (after noting "New York's liberal treatment of foreign judgments," the First Department ordered the attachment of $22 million in a bank account); Citadel Management Inc. v. Hertzog, 182 Misc.2d 902, 906 (Supreme Court, Queens Co. 1999) (order of attachment granted in the amount of $40,100,000 to secure a foreign money judgment issued in England), affd, 287 A.D.2d 533 (2d Dep't 2001); VCorp. Ltd. v. Redi Corp. (USA), 2004 WL , at *"2, 6 (S.D.N.Y. Oct. 9, 2004) (court confirmed the "ex parte order of attachment under New York CPLR 6201(5), which authorizes the attachment of assets to satisfy a foreign judgment under CPLR Article 53"). STATEMENT OF FACTS A complete statement of the facts relevant to this motion to confirm the Attachment Order is set forth in the accompanying Affirmation of Mitchell J. Geller, dated April 17,2017 (the "Geller Affirmation") and the exhibits contained in the accompanying Plaintiffs Exhibit Books To Plaintiffs Motion To Confirm The Ex Parte Order of Attachment, and the Affirmation of Yau 8 of 26

9 Wing Yiu, dated April 3, 2017 (the "Yiu Aff.") and the exhibits annexed thereto, a copy of which is annexed as Exhibit 9 in Plaintiffs Exhibit Book I. 2 A. Service of The Attachment Order Consistent with CPLR 6211(b), the Attachment Order (Exhibit 1 in Plaintiffs Exhibit Book 1) provides that "within a period not to exceed five days after the levy... the plaintiff shall move, on such notice as the Court shall direct to the defendants, the garnishees, if any, and the Sheriff, for an order confirming the Order of Attachment." The Attachment Order was delivered to the Sheriff of the County of New York (the "Sheriff) on Monday, April 10, Late that same day, the Sheriff attempted to serve Garnishee Wecast with the Attachment Order at Wecast's office at 375 Greenwich Street, Suite 516, New York, New York. However, the Director of Security at the building at 375 Greenwich Street refused to give the Sheriff access to Suite 516 on the grounds that the building is a "private building." (A copy of Deputy Sheriff David Chu's Affidavit, sworn to April 11, 2017, is annexed as Exhibit 4 in Plaintiffs Exhibit Book I). Since the Sheriff was prevented from serving the Attachment Order on Wecast on April 10, 2017, Plaintiff applied for an Emergency Ex Parte Order For Substitute Service of the Attachment Order. By an Emergency Ex Parte Order for Substitute Service entered on April 12, 2017, the Court granted plaintiffs application. (A copy of the Emergency Ex Parte Order for Substitute Service is annexed hereto as Exhibit 5 in Plaintiffs Exhibit Book I). 2 The exhibits referenced in the Geller Affirmation in support of this motion are contained in Plaintiffs Exhibit Book I and Plaintiffs Exhibit Book II. Exhibits 1-12 are contained in Plaintiffs Exhibit Book I and Exhibits are contained in Plaintiffs Exhibit Book II. 9 of 26

10 On April 12 and 13, 2017, Plaintiff served the Ex Parte Order for Substitute Service and the Attachment Order on Wecast as directed by the Court. (A copy of the Affirmation of Service of Mitchell J. Geller, dated April 14, 2017, is annexed as Exhibit 6 in Plaintiffs Exhibit Book I. 3 Thus, Plaintiff has timely moved to confirm the Attachment Order within the period required by CPLR 6211(b). B. The Need To Confirm The Attachment Order On information and belief, the shares owned by C Media in Wecast are the only known assets of C Media in the United States that can be used to satisfy ARM's Hong Kong Judgment, presently valued at approximately $ 26.3 million. Wecast is a publicly traded corporation incorporated in Nevada with its principal place of business in New York City. The application for the ex parte order of attachment was and this motion to confirm the Attachment Order is necessitated by Wecast's Form 10-K filing with the Securities and Exchange Commission (the "SEC") on March This SEC filing shows that C Media and Song have engaged in actions that have dissipated or transferred shares of C Media and Song in Wecast, arguably in an attempt to avoid satisfying the Hong Kong Judgment. Indeed, these actions have decreased C Media's share ownership in Wecast from 22.7% as of August 31, 2016 to 8.3% as of March Wecast's SEC filing on March 31, 2017, by itself, shows the need for the ex parte order of attachment pursuant to CPLR Absent the confirmation of the Attachment Order, ARM will have no assets of C Media in the United States that can be used to satisfy the Hong Kong Judgment. 3 Also contained within Exhibit 6 is a copy of Holland & Knight's letters to Jason Finkelstein, Corporate Secretary of Wecast and Shane McMahon, Vice Chairman and a director of Wecast, annexed to which were copies of the Attachment Order and the Emergency Ex Parte Order For Substitute Service, that were served by UPS Overnight Courier and by Certified Mail to them at Wecast's office and to their home addresses, and the s to ir@wcstnet.com, the address that Wecast specifically instructs its investors to use as a method of contact and to Willian N. Haddad, at Cooley LLP, Wecast's known United States counsel, at whaddad@cooley.com, together with a copy of the Orders). 10 of 26

11 Most importantly, according to Wecast's "Form 10-K" filing for the fiscal year ended December 31, 2016 on March 31, 2017 (the "Wecast March 31, 2017 SEC Filing"), C Media apparently is no longer the owner of 7,000,000 shares of Series A Preferred Stock in Wecast that C Media owned in 2016 and the 5,923,807 shares of Series E Convertible Preferred Stock that C Media owned in 2016 (which are the subject of the Stock Certificate delivered to ARM as security for C Media's obligations) somehow have been "converted" into 5,714,285 shares of common stock in Wecast. (A copy of the relevant pages from the Wecast March 31, 2017 SEC Filing is annexed as Exhibit 10 to Plaintiffs Exhibit Book I). The Wecast March 31, 2017 SEC Filing indicates that the 5,923,807 shares of Series E Convertible Preferred Stock shares have purportedly been "converted" to Wecast common stock and that C Media now owns 5,714,285 shares of common stock in Wecast. However, the Wecast March 31, 2017 SEC Filing provides no explanation for how C Media's 5,923,807 Series E Preferred Shares somehow converted from Series E Preferred Stock to 5,714,285 shares of common stock in Wecast. Moreover, the Wecast March 31, 2017 SEC Filing provides no explanation for how any action could be taken with respect to these 5,923,807 Series E Preferred Shares when ARM held the original of the Series E Convertible Preferred Stock Certificate in its possession and ARM's counsel put Wecast [then YOD] on notice that it could not take any action concerning this Series E Convertible Preferred Stock Certificate. (See Exhibit 2 to Yiu Affirmation (Exhibit 9 to Plaintiffs Exhibit Book I). Equally significant, the Wecast March 31, 2017 SEC Filing indicates that C Media apparently no longer owns 7,000,000 shares of Series A Preferred Stock in Wecast that C Media owned in Wecast's "Form 10-K" filing for the fiscal year ended December 31, 2015 with the SEC on March 31,2016 (the "Wecast March 31,2016 SEC Filing") states that C Media owned 11 of 26

12 5,293,807 shares of Series E Preferred Stock in Wecast as of December 31, The Wecast March 31, 2016 SEC Filing states that the 7,000,000 shares of Series A Preferred Stock and the 5,923,807 shares of Series E Preferred Stock are "directly owned by C Media Limited of which Mr. Song is the Chairman and Chief Executive Officer." (A copy of the relevant pages from the Wecast March 31, 2016 SEC Filing is annexed as Exhibit 11 in Plaintiffs Exhibit Book I). According to the Wecast March 31, 2017 SEC Filing, C Media transferred all 7,000,000 Class A Shares to Wecast Chairman Bruno Wu in an "insider transaction." However, Wecast has made no public filings showing when and how this transfer occurred or otherwise explaining this transaction transferring 7,000,000 shares of Series A Preferred Stock in Wecast that C Media owned in 2016 to Wecast's Chairman in At the very least, C Media's apparent transfer of 7,000,000 shares of Series A Preferred Stock in Wecast to Bruno Wu, Wecast's Chairman, and the "conversion" of the Series E preferred shares to Wecast common stock raises serious questions that the transfers were done to frustrate the enforcement of the Hong Kong Judgment and to prevent ARM from using such shares as security for the payment of the Hong Kong Judgment. Another factor requiring the confirmation of the Attachment Order is that the 5,714,285 shares of common stock owned by C Media in Wecast stock ("converted" from the Series E preferred shares) are freely tradeable and can be sold immediately in the open market. This is in sharp contrast to the Series E preferred shares that were subject to specific restrictions and other agreements. Absent the confirmation of the Attachment Order, C Media will be free to sell these shares, which constitute the only known assets in the United States that can be used to satisfy the Hong Kong Judgment. In short, confirmation of the Attachment Order is necessary to secure payment of the Hong Kong Judgment and, without the attachment, defendants will not be able to 12 of 26

13 satisfy the Hong Kong Judgment and the eventual recognition of the Hong Kong Judgment under Article 53 of the CPLR. Thus, absent the attachment, Defendants would be free to sell, transfer or take other action concerning these shares in Wecast stock, thereby preventing them from being used as security for the enforcement of the Hong Kong Judgment. C. The Parties Plaintiff ARM is a company incorporated and organized under the laws of Samoa. It has aprincipal place of business at Unit A-B, 16/F, China Overseas Building, No. 139 Hennessy Road, Wan Chai, Hong Kong. Defendant C Media is a company incorporated and organized under the laws of the Cayman Islands, with a registered office at Floor 4, Willow House, Cricket Square, P.O. Box 2804, Grand Cayman KY1-1112, Cayman Islands. Defendant Song is Chairman and Chief Executive Officer of C Media. Song also is a director of Wecast. In addition, Song is founder and a Principal of Chum Capital Group Limited ("Chum Capital"), a privately owned merchant bank. Chum Capital is based in Beijing, China and has offices at 105 Main Street in Hackensack, New Jersey. D. Agreements Between ARM and C Media and Song and Defendants' Breach Of The Redemption Agreement The Yiu Affirmation flffl 16-27) describes the agreements between the parties and Defendants' breach of a Redemption Agreement that led to ARM's commencement of the action in the High Court (the "Hong Kong Action") and the resulting Hong Kong Judgment in the principal amount of $ 24.9 million, plus interest and cost costs, issued on October 5, 2016 by the High Court. 13 of 26

14 E. ARM's Motion For Summary Judgment And The Pleadings in this Action As noted, on March 22, 2017, ARM filed a motion for summary judgment, pursuant to CPLR 3212, 5302 and 5303, to recognize and enforce the Hong Kong Judgment. The Affirmation of Au Yuen Yee Helen, dated March 14,2017, the solicitor from Dentons Hong Kong that represented ARM in the Hong Kong Action (the "Au Aff"), the Affirmation of Mitchell J. Geller, dated March 21, 2017 (the "Geller Aff."), and the Affirmation of Peter Henry Kendall, dated March 21, 2017 (the "Kendall Aff"), a solicitor from the Cayman Islands office of Walkers, were submitted in support of the motion for summary judgment. A copy of the Notice of Motion, Au Affirmation, Geller Affirmation and Kendall Affirmation, together with exhibits, is annexed as Exhibits 12,13,14 and 15 in Plaintiffs Exhibit Book I and II. A copy of ARM's Memorandum of Law in support of the summary judgment motion is annexed as Exhibit 16 in Plaintiffs Exhibit Book II. The Complaint, a copy of which was annexed as Exhibit 1 to the Geller Aff. (Exhibit 14) in the summary judgment motion, alleges that the Hong Kong Judgment satisfies the Article 53 requirements for recognition and enforcement, including: (a) that the Hong Kong Judgment "was issued by an impartial court through procedures compatible with due process of law;" (b) that Defendants "irrevocably" submitted to the "jurisdiction of the courts of Hong Kong" for any dispute related to the Redemption Agreement; (c) that the Hong Kong Court had personal jurisdiction over the Defendants; (d) that the Defendants appeared and defended the Hong Kong Action; and (e) that the Hong Kong Judgment is "final, conclusive and enforceable." Defendant's Answer, dated February 7, 2017, a copy of which was annexed as Exhibit 2 to the Geller Aff. (Exhibit 14) on the summary judgment motion, admits a number of the material allegations of the Complaint. Significantly, the Answer admits the following material facts: 14 of 26

15 (1) "Admits that C Media appeared and defended against Plaintiffs action in the Hong Kong court" and "admits" that "Defendant C Media was personally served in Hong Kong and appeared in the proceedings" (see Answer, Iffl 4, 57); (2) "Admits that the Hong Kong court had personal jurisdiction over the Defendants" (see Answer, ^ 5, 56); (3) "Admits" that C Media executed the Subscription Agreement (see Answer, f 20) and "admits that Defendant C Media entered into a Redemption Agreement with Plaintiff on or about January 24, 2016" (see Answer, ^ 32); (4) "Admits" that "by the due date of the first Redemption Payment, C Media had paid only $2,150,000 of the $5,000,000 it owed" (see Answer, ^ 42); (5) "Admits" that the "Redemption Agreement was governed by the law of Hong Kong" and "the Defendants 'irrevocably' submitted to the "jurisdiction of its courts" (see Answer, If 56); (6) "Admits" that "C Media acknowledged service of the Writ of Summons and Statement of Claim;" (see Answer, ^f 48); (7) "Admits" that "C Media appeared by counsel in the Hong Kong Court, and submitted affirmations and legal arguments in its defense" (see Answer, 150); and (8) "Admits" that "on October 5,2016, the Hong Kong Court issued a judgment against both Defendants finding them in breach of the Redemption Agreement" (see Answer, t 51). Notably, Defendants' Answer asserts no counterclaims. F. Calculating the Hong Kong Judgment and the Current Amount Of The Attachment The Hong Kong Judgment provides that C Media and Song are required to pay ARM the following (see Exh_3; Au Aff. (Exhibit 13, If 54): (1) "The sum of US $24,990,000 (or its Hong Kong dollars equivalent at the time of payment);" (2) "Interest on the sum of US $ 19,490,000 at prime rate plus 2%, being the commercial rate from 24 March 2016 to the date of judgment and thereafter at judgment rate until payment in full"; and of 26

16 (3) "Costs of this action, including costs of these 0.14 Summonses and all costs reserved be to the Plaintiff on party and party basis, with certificate of counsel (i.e the Senior Counsel)". The Au Affidavit (Exhibit 13. U 57) states: "The interest under the Hong Kong Judgment was awarded pursuant to section 48 (pre-judgment at a rate the Court thinks fit) and section 49 (post judgment at 'judgment rate') of the High Court Ordinance (Cap. 4). The Court awarded interest on the sum of US$19,490,000 at prime rate plus 2%, being the commercial rate (i.e. 7%, given the prime rate of Hong Kong remained at 5% at the material time) from 24 March 2016 to the date of the judgment." Accordingly, the Hong Kong Judgment states that ARM is entitled to interest on the sum of $19,490,000 at the rate of 7% from March 24, 2016 until the Hong Kong Judgment is paid. That figure equals $26,301,678 as of April 3, Thus, ARM seeks confirmation of the Attachment Order that attaches the tangible and intangible property owned or beneficially owned by C Media and Song located in New York, including, but not limited to, the shares of C Media or Song in Wecast, in the total amount of $26,301,678. ARGUMENT POINT I THIS COURT SHOULD GRANT PLAINTIFF'S MOTION TO CONFIRM THE ATTACHMENT ORDER CPLR 6212(a), in pertinent part, provides that "[o]n a motion... for an order of attachment, the plaintiff shall show, by affidavit and such other written evidence as may be submitted, that there is a cause of action, that it is probable that the plaintiff will succeed on the merits, that one or more grounds for attachment provided in section 6201 exists, and that the amount demanded from the defendant exceeds all counterclaims known to the plaintiff." of 26

17 Any property against which a judgment creditor may enforce a money judgment pursuant to CPLR 5201 is subject to attachment. CPLR Pursuant to CPLR 5201(b), "[a] money judgment may be enforced against any property which could be assigned or transferred, whether it consists of a present or future right or interest..." The Wecast shares owned by C Media or Song are property subject to a money judgment and can be the subject of a levy. See 3 N.Y. Prac. Com., Litigation in New York State Courts 18:41 (4 th ed). A. ARM Has A Cause Of Action Under Article 53 And Has Shown A Probability Of Success On Such Cause of Action When considering the first two requirements, "plaintiff must be given the benefit of all legitimate inferences and deductions that can be made from the facts stated." Considar, Inc. v. Redi Corp. Establishment, 238 A.D.2d 111 (1st Dep't 1997). ARM easily satisfies the first two requirements. First, ARM has a cause of action under Article 53 of the CPLR for recognition and enforcement of the Hong Kong Judgment. Second, ARM has demonstrated that it is likely to succeed on the merits of its claims against the defendants for recognition and enforcement of the Hong Kong Judgment. To establish a probability of success on the merits, a plaintiff must show that it is more likely than not to succeed on the merits of its underlying claim. See DLJ Mortg. Capital, Inc. v. Kontogiannis, 594 F. Supp. 2d 308, 319 (E.D.N.Y. 2009) (citation omitted). Again, all legitimate inferences should be drawn in favor of the party seeking attachment. See Considar, Inc., 238 A.D.2d at 111. "New York has traditionally been a generous forum in which to enforce judgments for money damages rendered by foreign courts." CIBC Mellon Trust Co. v. Mora Hotel Corp., 100 N.Y.2d 215, 221 (2003). New York courts have accorded "recognition to the judgments rendered in a foreign country under the doctrine of comity... [ajbsent some showing of fraud in the of 26

18 procurement of the foreign country judgment or that recognition of the judgment would do violence to some strong public policy of this State." Sung Hwan Co., Ltd. v. Rite Aid Corp., 1 N.Y.3d 78, 82 (2006) (citation omitted). Finally, it is axiomatic that a foreign judgment will be recognized and enforced even if the New York court does not have personal jurisdiction over the defendant in New York. See Abu Dhabi Commercial Bank PJSC v. Saad Trading, Contracting and Fin. Servs. Co.,Ill A.D.3d 609, 611 (1st Dep't 2014) (citations omitted). CPLR 5302 provides that Article 53 "shall apply to any foreign country judgment which is final, conclusive and enforceable when rendered." CPLR 5303 provides that "except as provided in section 5304, a foreign country judgment meeting the requirements of section 5302 is conclusive between the parties to the extent that it grants or denies recovery of a sum of money." The Hong Kong Judgment is enforceable pursuant to CPLR 5303 because it meets all the requirements of Section The judgment is "conclusive" because it grants ARM "the recovery of a sum of money" by awarding ARM $24.9 million in damages, plus interest and costs, owed to it pursuant to C Media's breach of the Redemption Agreement. See John Galliano, S.A. v. Stallion, Inc., 15 N.Y.3d at 79 (holding that "a foreign country judgment is considered conclusive between the parties to the extent that it grants or denies recovery of a sum of money"). The Hong Kong Judgment also satisfies CPLR 5302's requirements of finality and enforceability because it is "final" and has "immediate legal effect" from its date of entry, as C Media did not file a timely notice of appeal. (See Au Aff, ffil 8, 59). The Au Affirmation (Exhibit 13) demonstrates, inter alia, that the Hong Kong Judgment was rendered under a system which provides impartial tribunals or procedures compatible with the requirements of due process of law, that the Hong Kong court unquestionably had personal jurisdiction over defendants C Media and Song as they both expressly consented to the jurisdiction of 26

19 of the Hong Kong courts to hear disputes arising under the Redemption Agreement that was the subject of the Hong Kong Action, and they, represented by counsel, appeared in the action and vigorously defended the Hong Kong Action. Specifically, C Media and Song, through their solicitors, raised various arguments and defenses such as duress, unconscionability and that the terms of the agreements that they executed were "unfair." The Au Affirmation (Exhibit 131 also showed that the High Court rejected Defendants' purported defenses and arguments and granted summary judgment to ARM, that the Hong Kong Judgment is final, conclusive and enforceable and has immediate legal effect in Hong Kong upon its issuance and is not subject to any stay of execution and that the time for appealing has expired and no notice of appeal against the Hong Kong Judgment has been entered in the High Court. ARM's Memorandum of Law in support of the summary judgment motion (Exhibit 16) demonstrated that the Hong Kong Judgment clearly falls within the category of foreign country judgments enforceable under Article 53 of the CPLR. It meets both of the threshold requirements set forth in CPLR 5302 and 5303, namely, it grants "recovery of a sum of money" and is "final, conclusive and enforceable" in Hong Kong, the jurisdiction where it was rendered. ARM's summary judgment motion showed that none of the two mandatory grounds for non-recognition under CPLR 5304 apply. As required by CPLR 5304(a)(1), the Hong Kong Judgment was rendered under a system which provides impartial tribunals or procedures compatible with due process of law, as state and federal courts in New York have consistently acknowledged. State and federal courts in New York have consistently found that the Hong Kong legal system comports with New York's standards of due process. See, e.g., Downs v. Huen, 298 A.D.2d 177, 178 (1st Dep't 2002) (rejecting defendant's claim of denial of due process and concluding that "there is ample precedent that [the Hong Kong judicial system] always has of 26

20 comport[ed] with due process"); Bond v. Lichenstein, 129 A.D.3d 535 (1st Dep't 2015) (enforces Hong Kong judgment because "Defendant was accorded due process in the Hong Kong proceeding... and the court had personal jurisdiction over him"). Moreover, the Hong Kong court unquestionably had personal jurisdiction over defendants C Media Limited and Song Xuesong under CPLR 5304(a)(2) as they both expressly consented to the jurisdiction of the Hong Kong courts to hear disputes arising under the Redemption Agreement that was the subject of the Hong Kong Action, and they, represented by counsel, appeared in the action and vigorously defended the Hong Kong Action. Thus, defendants cannot successfully argue that the High Court did not have personal jurisdiction over them because the Redemption Agreement contains a mandatory forum selection clause stating that any claim or dispute shall be resolved through the courts of Hong Kong, and that the parties irrevocably submit to the jurisdiction of the courts of Hong Kong. (See Ex. 3 to Au Aff. (Exhibit 13); Au Aff, ^ 24). This provision of the Redemption Agreement constitutes under Hong Kong law the express consent to resolve any disputes thereunder in the Hong Kong courts. (See Au. Aff, If 31); see also John Galliano, S.A. v. Stallion, Inc., 62 A.D.3d 415, 416 (1st Dep't 2009) (when defendant contracted that all disputes would be submitted to a French court, such contractual language "effectively establishfed] personal jurisdiction over the defendant"). Finally, pursuant to CPLR 5305(a)(2), defendants' voluntarily appearance in and defense of the Hong Kong Action, precludes them from contesting recognition and enforcement of the Hong Kong Judgment on the basis of lack of personal jurisdiction. In the Hong Kong Action, C Media acknowledged that the High Court had personal jurisdiction when, in filling out its acknowledgement of service form, it indicated its intention to defend the action, and thereafter C Media did vigorously defend against ARM's claims. (See Au Aff, fflf 36, 44-45, 51; Ex. 5 to Au of 26

21 Aff); see also CIBC Mellon, 100 N.Y.2d at 225 (Court of Appeals holds that any appearance in a foreign action for a purpose other than preserving a jurisdictional exception qualifies as a voluntary appearance within the meaning of CPLR 5305(a)(2)). Having shown that neither of the two mandatory factors in CPLR 5304(a) apply, the Hong Kong Judgment, which is "final, conclusive and enforceable when rendered," must be recognized and enforced and ARM's summary judgment motion should be granted. 4 At the very least, for purposes of this motion for to confirm the Attachment Order, ARM has shown that it has a probability of success on the merits of its claim against the defendants. B. ARM's Cause of Action Falls Within The Grounds for An Attachment Under CPLR 6201 The third requirement is that one or more grounds for attachment set out in CPLR 6201 exists. ARM's cause of action based on a "judgment which qualifies for recognition under the provisions of article 53" is a ground for attachment under CPLR 6201(5). Additional grounds for an attachment exist under CPLR 6201(1) and (3). Since C Media is a "foreign corporation not qualified to do business in the state" and Song "is a nondomiciliary residing without the state," an attachment can be granted under CPLR 6201(1). Moreover, CPLR 6201(3) provides that "an order of attachment may be granted in any action where the plaintiff has demanded and would be entitled... to a money judgment against one or more defendants, when...(3) the defendant, with intent to... frustrate the enforcement of a judgment that might be rendered in plaintiffs favor, has assigned, disposed of..or secreted property, or remove it from the state." The Geller Affirmation and the Yiu Affirmation demonstrate that, based on the Wecast March 31, 2017 SEC Filing, C Media, in the last 7 months, 4 Defendants have "the burden of proving that a discretionary basis for non-recognition pursuant to CPLR 5304(b) applies." S.C. Chimexim S.A. v. Velco Enterprises Ltd., 36 F. Supp. 2d 206, 212 (S.D.N.Y. 1999) of 26

22 has engaged in a concerted effort to sell or otherwise transfer its shares in Wecast, arguably in an attempt to avoid satisfying the Hong Kong Judgment. See, e.g., Jannuzzo v. de Cuevas, 216 A.D.2d 37 (1 st Dep't 1995) (attachment properly granted "based upon plaintiffs proof that defendant was attempting to frustrate the judgment by assigning art work that constituted the bulk of her assets in this state"). C. The Amount Demanded Is In Excess Of All Counterclaims. The final statutory requirement is that "the amount demanded exceeds all counterclaims known to plaintiff." CPLR 6212(a). Defendants' Answer asserts no counterclaims. Thus, the amount demanded is in excess of all counterclaims known to plaintiff. * * * Thus, ARM has satisfied each of the requirements to confirm the Attachment Order. Moreover, in light of Defendants' nondomiciliary status and the liquid nature of the Wecast shares, there is a clear necessity for the confirmation of the Attachment Order to secure the Hong Kong Judgment and the eventual recognition of the Hong Kong Judgment under CPLR Article 53. D. Attachments Are Routinely Issued To Secure Payment Of A Foreign Money Judgment As noted, the New York courts consistently grant attachments to secure the payment of a foreign money judgment. See Harvardsky Prumyslovy Holding, A.S.-V Likvidaci v. Kozeny, 117 A.D.3d at (attachment of $22 million in a bank account based on a Czech judgment); CIBC Mellon Trust Co. v. Mora Hotel Corp., N.V, 100 N.Y.2d at 220 (affirming order confirming ex parte order of attachment to secure English judgment); Citadel Management Inc. v. Hertzog, 182 Misc. 2d at 906 (order of attachment in the amount of $40,100,000 to secure an English foreign money judgment), affd, 287 A.D.2d 533 (2d Dep't 2001); VCorp. Ltd. v. Redi Corp. (USA), 2004 WL , at **2, 6 (S.D.N.Y. Oct. 9, 2004) (confirming ex parte order of attachment to secure of 26

23 enforcement of English judgment "under New York CPLR 6201(5), which authorizes the attachment of assets to satisfy a foreign judgment under CPLR Article 53"); CDR Creances, S.A. v. Euro-American Lodging Corp., 1 Misc. 3d 1019(A), at *5 (Supreme Court, New York Co., Mar. 16, 2005) (order of attachment granted to secure enforcement of French judgment; "CPLR 6201 (5) provides for such a remedy [attachment] where a foreign judgment qualifies for recognition under Article 53"). Indeed, in each of these cases, the attachment was granted based on the existence of the foreign money judgment. As explained in the Commentaries to Section 6201 (McKinney's) C6201:5, when an attachment is sought pursuant to CPLR 6201(5), there is no need to show the defendant's dissipation of assets, as "[t]he defendant in such cases [Article 53 foreign judgment case] is an obvious security risk based on nonpayment of the former judgment -he is already a judgment debtor -and the claim is prima facie meritorious based on the judgment itself. " Moreover, and in any event, ARM has shown that defendants have taken steps to frustrate the enforcement of the Hong Kong Judgment, that there is a substantial risk that the defendants will not be able to satisfy the Hong Kong Judgment and that the attachment is necessary to secure payment of the Hong Kong Judgment presently valued at approximately $26.3 million. In addition, ARM has submitted proof on this motion from which the Court can conclude that defendants have disposed of assets in the past that could be used to satisfy the Hong Kong Judgment and that, absent the confirmation of the Attachment Order, defendants would be in a position to sell the shares they own in Wecast. Indeed, according to the Wecast March 31, 2017 SEC Filing, C Media apparently is no longer the owner of 7,000,000 shares of Series A Preferred Stock in Wecast that C Media owned in 2016 and the 5,923,807 shares of Series E Convertible Preferred Stock that C Media owned in 23 of 26

24 2016 (which are the subject of the Stock Certificate delivered to ARM as security for C Media's obligations) somehow have been "converted" into 5,714,285 shares of common stock in Wecast. Suffice it to say, these shares apparently could have used to satisfy the Hong Kong Judgment. Significantly, the 5,714,285 shares of common stock owned by C Media in Wecast stock ("converted" from the Series E preferred shares) are freely tradeable and can be sold immediately in the open market. This is in sharp contrast to the Series E preferred shares that were subject to specific restrictions and other agreements. Absent the attachment, C Media will be free to sell these shares, which constitute C Media's only known assets in the United States. In short, confirmation of the Attachment Order is necessary to secure payment of the Hong Kong Judgment and, without the attachment, defendants will not be able to satisfy the Hong Kong Judgment. Thus, absent the Attachment Order, Defendants would be free to sell, transfer or take other action concerning these shares in Wecast stock, thereby preventing them from being used as security for the enforcement of the Hong Kong Judgment. In sum, ARM has shown that a clear necessity exists for the confirmation of the Attachment Order to secure payment of ARM's eventual recognition and enforcement of the final, conclusive and enforceable Hong Kong Judgment in the principal amount of $24.9 million in principal, together with interest, fees and costs. The Hong Kong Judgment has taken immediate legal effect in Hong Kong and is no longer appealable. The High Court was an impartial tribunal that operated under procedures compatible with due process of law, as state and federal courts have often repeatedly acknowledged. Moreover, the High Court had personal jurisdiction over the Defendants when issuing the Hong Kong Judgment pursuant to the dispute resolution clause of the agreement litigated in the Hong Kong Action of 26

25 Given that Plaintiff "merely asks the court to perform its ministerial function of recognizing the foreign country money judgment and converting it into a New York judgment" John Galliano, S.A. v. Stallion, Inc., 15 N. Y.3d at 81 (emphasis added) and that Plaintiff has shown that the attachment is needed as security for the enforcement of the Hong Kong Judgment, plaintiff respectfully submits that its motion to confirm the attachment in the amount of $26,301,678 should be confirmed. E. Plaintiff Posted The Undertaking of $2, The Attachment Order directed that Plaintiff post an undertaking in the amount of $2,680, Plaintiff obtained the undertaking in the amount of $2,680, and filed a copy of the Undertaking with the Court on April 12, (See Exhibit 2). This undertaking protects the defendants from any potential damages they may sustain by reason of the Attachment Order, particularly given the short duration of Article 53 proceedings. 5 CONCLUSION For the reasons set forth herein and in the accompanying Affirmations of Mitchell J. Geller and Yau Wing Yiu, plaintiff ARM Internet Investment I Limited respectfully requests that this Court grant Plainitff s motion to confirm the Attachment Order in the amount of $ 26,3011,678 attaching all tangible and intangible property and assets owned or beneficially owned by Defendants C Media and Song or in which C Media and Song have an interest that is located in New York, including, but not limited to, 5,714,285 shares of Wecast common stock owned by C Media to secure the payment of the Hong Kong Judgment. 5 CPLR 6212(b) requires that on a motion for an order of attachment, "the plaintiff shall give an undertaking, in a total amount fixed by the court, but not less than five hundred dollars." Plaintiff reserves its right to move to reduce the amount of the Undertaking of 26

26 Dated: New York, New York April 17,2017 HOLLAND & KNIGHT LLP Attorneys for Plaintiff ARM Internet Investment I Limited By:_ hutu^m. J. AtAL^ Mitchell J. Gel Warren E. Gluck Mitchell J. Geller Elliot A. Magruder 31 W. 52 nd St. New York, NY (212) Warren.Gluck@hklaw.com Mitchell. Geller (ajhklaw. com Elliot.Magruder(a),liklaw.com # v of 26