EX-10.43 CALL OPTION AGREEMENT, DATED NOVEMBER 1,



 





Exhibit 10.43




Confidential




Call Option Agreement




among




Xiangdong Xiong




New Allyes Information Technology (Shanghai) Co., Ltd




and




Shenzhen Baifen Creation Advertisement Co., Ltd




 









 





Call Option Agreement




This Call Option Agreement (this “Agreement”) is entered into in Shanghai of the People’s
Republic of China (the “PRC”) as of November 1, 2004 by and among the following Parties:




	(1)	 	Xiangdong Xiong, Resident of the PRC, holding the Identification Card of the PRC (No.
310105710423201), with the address at Room 1205, No.53 of No.800 Lane, West Zhongshan Road,
Shanghai (hereinafter “Shareholder”)
	 
	(2)	 	New Allyes Information Technology (Shanghai) Co., Ltd., a wholly-owned foreign enterprise
incorporated under the laws of China (hereinafter “Company”)
	 
	(3)	 	Shenzhen Baifen Creation Advertisement Co., Ltd, a company of limited liabilities
incorporated under the laws of PRC (hereinafter “Baifen Creation”)
	 
	 	 	(Any sole party hereinafter shall be individually referred to as a “Party” and collectively,
the “Parties”.)





Whereas:





	(1)	 	Shareholder is the enrolled shareholder of Baifen Creation, legally holding a portion of
6.98% of the equity interest in Baifen Creation, the equity structure proportion of Baifen
Creation is listed in the Appendix I as of the execution date of this Agreement.
	 
	(2)	 	The Shareholder and the Company concluded the Loan Agreement on November 1, 2004 and the
Equity Pledge Agreement on November 1, 2004.
	 
	(3)	 	The Shareholder intends to transfer to the company or the person(s) designated by it
(hereinafter “Designee(s)”), and the Designee(s) is willing to accept, all his respective
equity interest in Baifen Creation, to the extent not violating PRC Law.
	 
	(3)	 	In order to conduct the above equity transfer, the Shareholder agree to jointly grant the
Company an irrevocable call option for equity transfer (hereinafter the “Call Option”), under
which and to the extent permitted by PRC Law, the Shareholder shall on demand of the Company
transfer the Option Equity (as defined below) to the Company and/or the Designee(s) in
accordance with the provisions contained herein.





Therefore, the Parties hereby have reached the following agreement upon mutual consultations:



 









 





Article 1 — Definition





	1.1	 	Except as otherwise construed in the context, the following terms in this Agreement shall be
interpreted to have the following meanings:





“PRC Law” shall mean the then valid laws, administrative regulations, administrative rules, local
regulations, judicial interpretations and other binding regulatory documents of the People’s
Republic of China.



“Designee(s)” shall mean individuals, companies, Chinese-foreign equity joint ventures, partnership
enterprises, trust or non-company organizations.



“Option Equity” shall mean, in respect of the Shareholder, all of the equity interest held thereby
in the Baifen Creation Registered Capital (as defined below).



“Baifen Creation Registered Capital” shall mean the registered capital of Baifen Creation as of the
execution date of this Agreement, i.e., RMB2,150,000 which shall include any expanded registered
capital as the result of any capital increase within the term of this Agreement.



“Transferred Equity” shall mean the equity of Baifen Creation which the Company or Designee(s) has
the right to require the Shareholder to transfer to it or its designated entity or individual when
the Company or Designee(s) exercises its Call Option (hereinafter the “Exercise of Option”) in
accordance with Article 3.2 herein, the amount of which may be all or part of the Option Equity and
the details of which shall be determined by the Company or the Designee(s) at its sole discretion
in accordance with the then valid PRC Law and from its commercial consideration.



“Transfer Price” shall mean all the consideration that the Company or the Designee(s) is required
to pay to the Shareholder in order to obtain the Transferred Equity upon each Exercise of Option.



“Business Permits” shall mean any approvals, permits, filings, registrations etc. which Baifen
Creation is required to have for legally and validly operating its advertisement designing,
producing, agency, publishing and all such other businesses, including but not limited to the
Business License of the Corporate Legal Person, the Tax Registration Certificate and such other
relevant licenses and permits as required by the then PRC Law.



“Baifen Creation Assets” shall mean all the tangible and intangible assets which Baifen Creation
owns or has the right to use during the term of this Agreement, including but not limited to any
immoveable and moveable assets, and such intellectual property rights as trademarks, copyrights,
patents, proprietary know-how, domain names and software use rights.



 









 





“Material Agreement” shall mean an agreement to which Baifen Creation is a party and which has
a material impact on the businesses or assets of Baifen Creation.



“Loan Agreement” shall mean the Loan Agreement entered into between the Shareholder and the
Company.




	1.2	 	The references to any PRC Law herein shall be deemed






	 	(1)	 	to include the references to the amendments, changes, supplements and reenactments of
such law, irrespective of whether they take effect before or after the formation of this
Agreement; and
	 
	 	(2)	 	to include the references to other decisions, notices or regulations enacted in
accordance therewith or effective as a result thereof.






	1.3	 	Except as otherwise stated in the context herein, all references to an Article, clause, item
or paragraph shall refer to the relevant part of this Agreement.





Article 2 – Grant of Call Option





	 	 	The Shareholder agrees to grant the Company or the Designee(s) hereby irrevocably and without
any additional conditions with a Call Option, under which the Company or the Designee(s) shall
have the right to require the Shareholder to transfer the Option Equity to the Company or the
Designee(s) in such method as set out herein and as permitted by PRC Law. The Company or the
Designee(s) also agrees to accept such Call Option.





Article 3 – Method of Exercise of Option





	3.1	 	To the extent permitted by PRC Law, the Company shall have the sole discretion to determine
the specific time, method and times of its Exercise of Option.
	 
	3.2	 	If the then PRC Law permits the Company or the Designee(s) to hold all the equity interest of
Baifen Creation, then the Company shall have the right to elect to exercise all of its Call
Option at once, where the Company or the Designee(s) shall accept all the Option Equity from
the Shareholder at once; if the then PRC Law permits the Company or the Designee(s) to hold
only part of the equity in Baifen Creation, the Company shall have the right to determine the
amount of the Transferred Equity within the extent not exceeding the upper limit of
shareholding ratio set out by the then PRC Law (hereinafter the “Shareholding Limit”), where
the Company or the Designee(s) shall accept such amount of the Transferred Equity from the
Shareholder. In the latter case, the Company shall have the right to exercise its Call Option
at multiple times in line with the gradual deregulation of PRC Law on the permitted
Shareholding Limit, with a view to ultimately acquiring all the Option Equity.




 









 






	3.3	 	At each Exercise of Option by the Company, the Shareholder shall transfer their respective
equity in the Baifen Creation to the Company or the Designee(s) respectively in accordance
with the amount required by the Company. The Company or the Designee(s) shall pay the Transfer
Price to the Shareholder for the Transferred Equity accepted in each Exercise of Option.
	 
	3.4	 	In each Exercise of Option, the Company may accept the Transferred Equity by itself or
designate any third party to accept all or part of the Transferred Equity.
	 
	3.5	 	On deciding each Exercise of Option, the Company shall issue to the Shareholder a notice for
exercising the Call Option (hereinafter the “Exercise Notice”, the form of which is set out as
Appendix II hereto). The Shareholder shall, upon receipt of the Exercise Notice, forthwith
transfer all the Transferred Equity in accordance with the Exercise Notice to the Company or
the Designee(s) in such method as described in Article 3.3 herein.
	 
	3.6	 	The Shareholder hereby undertakes and guarantees that once the company issues the Exercise
Notice:






	 	(1)	 	it shall immediately hold or request to hold a shareholders’ meeting and adopt a
resolution through the shareholders’ meeting, and take all other necessary actions to
agree to the transfer of all the Call Option to the Company or the Designee(s) at the
Transfer Price;
	 
	 	(2)	 	it shall immediately enter into an equity transfer agreement with the Company or
the Designee(s) for transfer of all the Transferred Equity to the Company or the
Designee(s) at the Transfer Price; and
	 
	 	(3)	 	it shall provide the Company with necessary support (including providing and
executing all the relevant legal documents, processing all the procedures for government
approvals and registrations and bearing all the relevant obligations) in accordance with
the requirements of the Company and of the laws and regulations, in order that the
Company or the Designee(s) may take all the Transferred Equity free from any legal
defect.






	3.7	 	At the meantime of this Agreement, the Shareholder shall respectively enter into a power of
attorney (hereinafter the “Power of Attorney”, the form of which is set out as Appendix III
hereto), authorizing in writing any person designated by the Company to, on behalf of the
Shareholder, to enter into any and all of the legal documents in accordance with this
Agreement so as to ensure that the Company or the Designee(s) takes all the Transferred Equity
free from any legal defect. Such Power of Attorney shall be delivered for custody by the
Company and the Company may, at any time if necessary, require the Shareholder to enter into




 









 






	 	 	multiple copies of the Power of Attorney respectively and deliver the same to the relevant
government department.
	 
	3.8	 	The Transferred Price obtained by the Shareholder upon each Exercise of Option shall be first
used to repay the relevant loans of the Shareholder under the Loan Agreements.





Article 4 – Representations and Warranties





	4.1	 	The Shareholder hereby represents and warrants as follows:






	 	4.1.1	 	The Shareholder is a PRC citizen with full capacity, with full and independent
legal status and legal capacity to execute, deliver and perform this Agreement, and may
act independently as a litigant party.
	 
	 	4.1.2	 	The Shareholder has full power and authorization to execute and deliver this
Agreement and all the other documents to be entered into by it in relation to the
transaction referred to herein, and it has the full power and authorization to complete
the transaction referred to herein. This Agreement is executed and delivered by Personal
Shareholders legally and properly. This Agreement constitutes the legal and binding
obligations on Personal Shareholders and is enforceable on it in accordance with its
terms and conditions.
	 
	 	4.1.3	 	The Shareholder is the enrolled legal owner of the Option Equity as of the
effective date of this Agreement, and except the rights created by this Agreement, the
Shareholder shall cause the shareholders’ meeting not to approve any legal or beneficial
rights or interest of the equity to be deal by sale, transfer, mortgage or other ways or
to permit any other guarantees set up upon it. In accordance with this Agreement, the
Company or the Designee(s) may, after the Exercise of Option, obtain the proper title to
the Transferred Equity free from any lien, pledge, claim and other encumbrances and third
party rights.
	 
	 	4.1.4	 	Baifen Creation shall obtain complete Business Permits as necessary for its
operations upon this Agreement taking effect, and Baifen Creation shall have sufficient
rights and qualifications to operate within PRC the businesses of advertising and other
business relating to its current business structure. Baifen Creation has conducted its
business legally since its establishment and has not incurred any cases which violate or
may violate the regulations and requirements set forth by the departments of commerce and
industry, tax, culture, news, quality technology supervision, labor and social security
and other governmental departments or any disputes in respect of breach of contract.




 









 












	4.2	 	The Company hereby represents and warrants as follows:






	 	4.2.1	 	The Company is a limited liability corporation duly registered and validly
existing under PRC Law, with independent status as a legal person; The Company has full
and independent legal status and legal capacity to execute, deliver and perform this
Agreement, and may act independently as a subject of actions.
	 
	 	4.2.2	 	The Company has full power and authorization to execute and deliver this Agreement
and all the other documents to be entered into by it in relation to the transaction
referred to herein, and it has the full power and authorization to complete the
transaction referred to herein.





Article 5 – Undertakings by the Shareholders




The Shareholder hereby undertakes:




	5.1	 	Within the term of this Agreement that he must take all necessary measures to ensure that
Baifen Creation is able to obtain all the Business Permits necessary for its business in a
timely manner and all the Business Permits remain in effect at any time.
	 
	5.2	 	The Shareholder hereby undertakes within the term of this Agreement that without the prior
written consent by the Company,






	 	5.2.1	 	the Shareholder shall not transfer or otherwise dispose of any Option Equity or
create any encumbrance or other third party rights on any Option Equity;
	 
	 	5.2.2	 	it shall not increase or decrease the Baifen Creation Registered Capital;
	 
	 	5.2.3	 	it shall not dispose of or cause the management of Baifen Creation to dispose of
any of the Baifen Creation Assets (except as occurs during the arm’s length operations);
	 
	 	5.2.4	 	it shall not terminate or cause the management of Baifen Creation to terminate
any Material Agreements entered into by Baifen Creation, or enter into any other
Material Agreements in conflict with the existing Material Agreements;
	 
	 	5.2.5	 	it shall not appoint or cancel or replace any executive directors or members of
board of directors (if any), supervisors or any other management personnel of Baifen
Creation to be appointed or dismissed by the Shareholders;




 









 






	 	5.2.6	 	it shall not announce the distribution of or in practice release any
distributable profit, dividend or share profit or cast affirmative votes regarding the
aforesaid distribution or release;
	 
	 	5.2.7	 	to maintain the ownership of Baifen Creation to all its assets, it shall sign
all the necessary or appropriate documents, take all the necessary or appropriate
actions, file any necessary or appropriate claim or make any necessary and appropriate
defence to all the claims;
	 
	 	5.2.8	 	it shall not amend the Articles of Association of Baifen Creation;
	 
	 	5.2.9	 	it shall ensure that Baifen Creation shall not lend or borrow any money, or
provide guarantee or engage in security activities in any other forms, or bear any
substantial obligations other than on the arm’s length basis.






	5.3	 	The Shareholder hereby undertakes that it must make all its efforts during the term of this
Agreement to develop the business of Baifen Creation, and ensure that the operations of Baifen
Creation are legal and in compliance with the regulations and that it shall not engage in any
actions or omissions which might harm the Baifen Creation Assets or its credit standing or
affect the validity of the Business Permits of Baifen Creation.





Article 6 — Confidentiality





	6.1	 	Notwithstanding the termination of this Agreement, the Shareholder shall be obligated to keep
in confidence the following information (hereinafter collectively the “Confidential
Information”):






	 	(i)	 	information on the execution, performance and the contents of this Agreement;
	 
	 	(ii)	 	the commercial secret, proprietary information and customer information in relation
to the Company known to or received by it as the result of execution and performance of
this Agreement; and
	 
	 	(iii)	 	the commercial secrets, proprietary information and customer information in
relation to Baifen Creation known to or received by it as the shareholder of Baifen
Creation.






	 	 	The Shareholder may use such Confidential Information only for the purpose of performing its
obligations under this Agreement. The Shareholder shall not disclose the above Confidential
Information to any third parties without the written consent from the Company, or they shall
bear the default liability and indemnify the losses.
	 
	6.2	 	Upon termination of this Agreement, the Shareholder shall, upon demand by the




 









 






	 	 	Company, return, destroy or otherwise dispose of all the documents, materials or software
containing the Confidential Information and suspend using such Confidential Information.
	 
	6.3	 	Notwithstanding any other provisions herein, the validity of this Article shall not be
affected by the suspension or termination of this Agreement.





Article 7 – Term of Agreement





	7.1	 	This Agreement shall take effect as of the date of formal execution by the Parties and
terminate when all the Option Equity is legally transferred under the name of the Company and
the Designee(s) in accordance with the provisions of this Agreement.





Article 8
– Notice





	8.1	 	Any notice, request, demand and other correspondences made as required by or in accordance
with this Agreement shall be made in writing and delivered to the relevant Party.
	 
	8.2	 	The abovementioned notice or other correspondences shall be deemed to have been delivered
when it is transmitted if transmitted by facsimile; it shall be deemed to have been delivered
when it is delivered if delivered in person; it shall be deemed to have been delivered five
(5) days after posting the same if posted by mail.





Article 9 – Liability for Breach of Contract





	9.1	 	The Parties agree and confirm that, if the Shareholder (hereinafter the “Defaulting Party”)
breaches substantially any of the provisions herein or omits substantially to perform any of
the obligations hereunder, or fails substantially to perform any of the obligations under this
Agreement, such a breach or omission shall constitute a default under this Agreement
(hereinafter a “Default”), then the Company shall have the right to require the Defaulting
Party to rectify such Default or take remedial measures within a reasonable period. If the
Defaulting Party fails to rectify such Default or take remedial measures within such
reasonable period or within ten (10) days of non-defaulting Party’s notifying the Defaulting
Party in writing and requiring it to rectify the Default, then non-defaulting Party shall have
the right at its own discretion to select any of the following remedial measures:






	 	(1)	 	to terminate this Agreement and require the Defaulting Party to indemnify it for all
the damage; or
	 
	 	(2)	 	mandatory performance of the obligations of the Defaulting Party




 









 






	 	 	 	hereunder and require the Defaulting Party to indemnify it for all the damage.






	9.2	 	The Parties agree and confirm that in no circumstances shall the Shareholder request the
termination of this Agreement for any reason, except otherwise stipulated by law or this
Agreement.
	 
	9.3	 	The rights and relieves prescribed in this Agreement are accumulative and don’t exclude
any other rights or relieves ruled by the laws.
	 
	9.4	 	Notwithstanding any other provisions herein, the validity of this Article shall stand
disregarding the suspension or termination of this Agreement.





Article 10 — Miscellaneous





	10.1	 	This Agreement shall be prepared in the Chinese language in 2 original copies, with each
involved Party holding one (1) copy hereof.
	 
	10.2	 	The formation, validity, execution, amendment, interpretation and termination of this
Agreement shall be subject to PRC Law.
	 
	10.3	 	Any disputes arising hereunder and in connection herewith shall be settled through
consultations among the Parties to the dispute, and if the Parties to the dispute cannot reach
an agreement regarding such disputes within [thirty (30)] days of their occurrence, such
disputes shall be submitted to China International Economic and Trade Arbitration Commission
Shanghai Branch for arbitration in Shanghai in accordance with the arbitration rules of such
Commission, and the arbitration award shall be final and binding on all Parties to the
dispute.
	 
	10.4	 	Any rights, powers and remedies empowered to any Party by any provisions herein shall not
preclude any other rights, powers and remedies enjoyed by such Party in accordance with laws
and other provisions under this Agreement, and the exercise of its rights, powers and remedies
by a Party shall not preclude its exercise of its other rights, powers and remedies by such
Party.
	 
	10.5	 	Any failure or delay by a Party in exercising any of its rights, powers and remedies
hereunder or in accordance with laws (hereinafter the “Party’s Rights”) shall not lead to a
waiver of such rights, and the waiver of any single or partial exercise of the Party’s Rights
shall not preclude such Party from exercising such rights in any other way and exercising the
remaining part of the Party’s Rights.
	 
	10.6	 	The titles of the Articles contained herein shall be for reference only, and in no
circumstances shall such titles be used in or affect the interpretation of the provisions
hereof.




 









 






	10.7	 	Each provision contained herein shall be severable and independent from each of other
provisions, and if at any time any one or more articles herein become invalid, illegal or
unenforceable, the validity, legality or enforceability of the remaining provisions herein
shall not be affected as a result thereof.
	 
	10.8	 	Upon execution, this Agreement shall substitute any other legal documents previously executed
by the Parties on the same subject. Any amendments or supplements to this Agreement shall be
made in writing and shall take effect only when properly signed by the Parties to this
Agreement.
	 
	10.9	 	Without prior written consent by the Company, the Shareholder shall not transfer to any third
party any of its right and/or obligation under this Agreement, the Company shall have the
right to transfer to any third party designated by it any of its right and/or obligation under
this Agreement after notice to the Shareholder.
	 
	10.10	 	This Agreement shall be binding on the legal successors of the Parties.





[The remainder of this page is left blank]




 









 








IN WITNESS HEREOF, the following Parties have caused this Call Option Agreement to be executed as
of the date and in the place first here above mentioned.



Xiangdong Xiong




/s/ Xiangdong Xiong




New Allyes Information Technology (Shanghai) Co., Ltd.




Signature by Authorized Representative:

/s/ Hailong Zhu

CEO




Shenzhen Baifen Creation Advertisement Co., Ltd




Signature by Authorized Representative:

/s/ Hailong Zhu




 









 








Appendix I:




Section I-Basic Information of Baifen Creation




	 	 	 
	Company Name

	 	Shenzhen Baifen Creation Advertisement Co., Ltd
	 
	 	 
	Registered Capital (RMB)

	 	2,150,000






Equity Structure




	 	 	 	 	 	 	 	 	 
	Name of the Shareholder	 	Capital Contribution (RMB)	 	Equity Structure
	Jiangang Wang
	 	 	1,999,930	 	 	 	93.02	%
	Xiangdong Xiong
	 	 	150,070	 	 	 	6.98	%
	Total
	 	 	2,150,000	 	 	 	100	%






 









 





Appendix II:




Format of the Option Exercise Notice




To: [Xiangdong Xiong]




As our company and you signed an Call Option Agreement as of December 30, 2000 (hereinafter the
“Option Agreement”), and reached an agreement that you shall transfer the equity you hold in
Shenzhen Baifen Creation Advertisement Co., Ltd (hereinafter the “Baifen Creation”) to our company
or any third parties designated by our company on demand of our company to the extent as permitted
by PRC Law and regulations,



Therefore, our company hereby gives this Notice to you as follows:



Our company hereby requires to exercise the Call Option under the Option Agreement and [our
company]/[name of company/individual] designated by our company shall accept the equity you hold
accounting for 50% of Baifen Creation Registered Capital (hereinafter the “Proposed Accepted
Equity”). You is required to forthwith transfer all the Proposed Accepted Equity to [our
company]/[name of designated company/individual] upon receipt of this Notice in accordance with the
agreed terms in the Option Agreement.



Best regards,




New Allyes Information Technology (Shanghai) Co., Ltd..

(Chop)




Authorized Representative:                     

Date:                     




 









 





Appendix III:




Form of the Power of Attorney




I,
Xiangdong Xiong, hereby irrevocably entrust ___ [with his/her identity card
number of ___] , as the authorized representative of me/the company, to sign the
Equity Transfer Agreement and other relevant legal documents between me and ___
regarding the Equity Transfer of Shanghai Allyes Advertisement Co., Ltd



	 	 	 	 	 	 	 
	 

	 	Signature:
	 	 
 

	 	 
	 

	 	Date: