Exhibit 10.165**Confidential**  **CALL OPTION AGREEMENT****AMONG****SHANGHAI FOCUS MEDIA ADVERTISEMENT CO., LTD****SHANGHAI FOCUS MEDIA ADVERTISING AGENCY CO., LTD****CGEN DIGITAL TECHNOLOGY (SHANGHAI) COMPANY LTD****AND****SHANGHAI CGEN CULTURE COMMUNICATION COMPANY LTD****DATED AS OF****January 5 2008**  
 

 
**CALL OPTION AGREEMENT**This **Call Option Agreement**(this “**Agreement**”) is entered into in Shanghai of the People’s Republicof China (the “**PRC**”) as of **January 5 2008**by and among the following Parties:(1) **Shanghai Focus Media Advertisement Co., Ltd.**(hereinafter “**Focus Media Advertisement**”)   **Registered Address:**Unit F Room 1003, No.1027, Changning Road, Changning District, Shanghai (2) **Shanghai Focus Media Advertising Agency Co., Ltd.**(hereinafter “**Focus Media AdvertisingAgency**”)   **Registered Address:**Room A65, 28th Floor, No. 369, Changning Road, ChangningDistrict, Shanghai (3) **CGEN Digital Technology (Shanghai) Company Ltd.**(hereinafter “**CGEN Digital**”)   **Registered Address:**Room 2207, Building 2, 200 Zhangheng Road, Zhangjiang High TechnologyPark, Shanghai (4) **Shanghai CGEN Culture Communications Company Ltd (hereinafter “CGEN Culture”)**   **Registered Address:**Unit A, F4, North Tower, 1016 Dingxi Road, Changning District, Shanghai(Focus Media Advrtisement and Focus Media Adverting Agency hereinafter shall be individuallyreferred to as a “**Shareholder**” and collectively, “**Shareholders**”. Shareholders, CGEN Digital andCGEN Culture hereinafter shall be individually referred to as a “**Party**” and collectively referredto as “**Parties**”.)**WHEREAS:**(1) Shareholders are enrolled shareholders of CGEN Culture, legally holding all the equity of thecompany as of the execution date of this Agreement, of which Focus Media Advertisement holds90% interest and Focus Media Advertising Agency holds 10%. (2) Subject to non-violation of PRC Law, the Shareholders intend to transfer to CGEN Digital, andCGEN Digital is willing to accept, all their respective equity interest in CGEN Culture.
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(3) In order to realise the above equity transfer transaction, the Shareholders agree to jointlygrant CGEN Digital an irrevocable call option for equity transfer (hereinafter the “**CallOption**”), under which and to the extent permitted by PRC Law, the Shareholders shall onrequest of CGEN Digital transfer the Option Equity (as defined below) to CGEN Digital and/orany other entity or individual designated by it in accordance with the provisions containedherein.**Therefore**, the Parties hereby have reached the following agreement upon mutual consultations.**Article 1 — Definitions**1.1 Except as otherwise construed in the context, the following terms in this Agreement shall beinterpreted to have the following meanings:“**PRC Law**” shall mean the then valid laws, administrative regulations, administrative rules, localregulations, judicial interpretations and other binding regulatory documents of the People’sRepublic of China.“**Option Equity**” shall mean, in respect of each of the Shareholders, all of the equity interest heldthereby in CGEN Culture Registered Capital (as defined below); (in respect of Focus MediaAdvertisement, means the 90% equity it holds in CGEN Culture and in respect of Focus MediaAdvertising Agency, means the 10% equity it holds in CGEN Culture.).**“CGEN Culture Registered Capital**” shall mean the registered capital of CGEN Culture as of the dateof this Agreement, which shall include any increased registered capital as the result of anycapital increase taking place within the term of this Agreement.“**Transferred Equity**” shall mean the equity of CGEN Culture which CGEN Digital has the right torequest the Shareholders to transfer to it or its designated entity or individual when CGEN Digitalexercises its Call Option (hereinafter the “**Exercise of Option**”) in accordance with Article 3.2herein, the amount of which may be all or part of the Option Equity and the details of which shallbe determined by CGEN Digital at its sole discretion in accordance with the then valid PRC Law andits commercial consideration.“**Transfer Price**” shall mean all the consideration that CGEN Digital or its designated entity orindividual is required to pay to the Shareholders in order to obtain the Transferred Equity uponeach Exercise of Option. Upon each Exercise of Option of CGEN Culture by CGEN Digital, all theTransfer Price that CGEN Digital or its designated entity or individual shall pay to theShareholders shall be calculated by multiplying the ratio of such Option Equity to the registeredcapital of CGEN Culture
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with the total amount of the registered capital of CGEN Culture. If any regulatory provisionrestricts Transfer Price under then PRC Law, CGEN Digital or its designated entity or individualshall be entitled to pay the lowest price permitted by PRC Law as the Transfer Price.“**Business Permits**” shall mean any approvals, permits, filings, registrations etc. which CGENCulture is required to have for legally and validly operating its advertisement designing,producing, agency, publishing and any other businesses, including but not limited to BusinessLicense of the Corporate Legal Person, Tax Registration Certificate and any other relevant licensesand permits as required by then PRC Law.“**CGEN Culture Assets**” shall mean all the tangible and intangible assets which CGEN Culture owns orhas the right to use during the term of this Agreement, including but not limited to any realestate and moveable assets, intellectual property rights as trademarks, copyrights, patents,proprietary know-how, domain names and software use rights, and other documents, files and materialsuch as client information and database.“**Material Agreement**” shall mean an agreement to which CGEN Culture is a party and which has amaterial impact on the businesses or assets of CGEN Culture,1.2 The references to any PRC Law herein shall be deemed (1) to include any references to theamendments, changes, supplements and reenactments of such law, irrespective of whether theytake effect before or after the formation of this Agreement; and (2) to include any referencesto other decisions, notices or regulations enacted in accordance therewith or effective as aresult 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 Parties hereby agree to irrevocably and with no additional condition grant CGEN Digital anexclusive Call Option, under which CGEN Digital have the right to request the Shareholders totransfer the Option Equity to CGEN Digital or its designated entity or individual in themethod set out herein and as permitted by PRC Law. CGEN Digital also agrees to accept suchCall Option.**Article 3 — Method of Exercise of Option**3.1 Subject to permission by PRC Law, CGEN Digital shall have the absolute sole
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  discretion to determine the specific time, method and times of its Exercise of Option. 3.2 If the then PRC Law permits CGEN Digital and/or other entity or individual designated by itto hold all the equity interest of CGEN Culture, then CGEN Digital shall have the right toelect to exercise all of its Call Option at once, where CGEN Digital and/or other entity orindividual designated by it shall accept all the Option Equity from the Shareholders at once;if then PRC Law permits CGEN Digital and/or other entity or individual designated by it tohold only part of the equity in CGEN Culture, CGEN Digital shall have the right to determinethe amount of the Transferred Equity within the extent not exceeding the upper limit ofshareholding ratio set out by then PRC Law (hereinafter the “**Shareholding Threshold**”), whereCGEN Digital and/or other entity or individual designated by it shall accept such amount ofTransferred Equity from the Shareholders. In the latter case, CGEN Digital shall have theright to exercise its Call Option at multiple times in line with the gradual deregulation ofPRC Law on the permitted Shareholding Threshold, with a view to ultimately acquiring all theOption Equity. 3.3 At each Exercise of Option by CGEN Digital, each of the Shareholders shall transfer theirrespective equity in CGEN Culture to CGEN Digital and/or other entity or individual designatedby it respectively in accordance with the amount required in the Exercise Notice stipulated inArticle 3.5. CGEN Digital and other entity or individual designated by it shall pay theTransfer Price to each of the Shareholders who has transferred the Transferred Equityaccepted in each Exercise of Option. If permitted by PRC Law, CGEN Digital shall have theright to set-off the Transfer Price with its/its affiliates’ credit rights (if any) againstthe Shareholders. 3.4 In each Exercise of Option, CGEN Digital may accept the Transferred Equity by itself ordesignate any third party to accept all or part of the Transferred Equity. 3.5 On deciding each Exercise of Option, CGEN Digital shall issue a notice for exercising theCall Option to the Shareholders (hereinafter the “**Exercise Notice**”, the form of which is setout as Appendix I hereto). The Shareholders shall, upon receipt of the Exercise Notice,forthwith transfer all the Transferred Equity in accordance with the Exercise Notice to CGENDigital and/or other entity or individual designated by CGEN Digital in the method asdescribed in Article 3.3 herein. 3.6 The Shareholders hereby severally undertake and guarantee that once CGEN Digital issues theExercise Notice in respect to the specific Transferred Equity in CGEN Culture held by it: 3.6.1 it shall immediately hold or request to hold a shareholders’ meeting of
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   CGEN Culture, adopt a resolution through the shareholders’ meeting, and take allother necessary actions to agree to the transfer of all the Call Option to CGENDigital and/or other entity or individual designated by it at the Transfer Price andwaive the possible preemption rights; 3.6.2 it shall immediately enter into an equity transfer agreement with CGEN Digitaland/or other entity or individual designated by it for transfer of all the TransferredEquity to CGEN Digital and/or other entity or individual designated by it at theTransfer Price; and  3.6.3 it shall provide CGEN Digital with necessary support (including providing andexecuting all the relevant legal documents, processing all the procedures for governmentapprovals and registrations and bearing all the relevant obligations) in accordance withthe requirements of CGEN Digital and of the laws and regulations, in order that CGENDigital and/or other entity or individual designated by it takes all the TransferredEquity free from any legal defect.3.7 At the meantime of this Agreement, the Shareholders shall respectively enter into a power ofattorney (hereinafter the “**Power of Attorney**”, the form of which is set out as Appendix IIhereto), authorizing in writing any person designated by CGEN Digital to, on behalf of suchShareholder, to enter into any and all of the legal documents in accordance with thisAgreement so as to ensure that CGEN Digital and/or other entity or individual designated by ittake all the Transferred Equity free from any legal defect. Such Power of Attorney shall bedelivered to remain custody of CGEN Digital and CGEN Digital may, at any time if necessary,require the Shareholders to execute multiple copies of the Power of Attorney respectively anddeliver the copy of Power of Attorney to the relevant government department.**Article 4 — Representations and Warranties**4.1 Each of the Shareholders hereby severally represents and warrants in respect to itself andCGEN Culture as follows: 4.1.1 Each of Shareholders is a limited liability corporation duly registered andvalidly existing under PRC Law with complete and independent status as a legal person andhas appropriate authorisation to execute, deliver and perform this Agreement, and iscapable of acting independently as a subject of legal actions.  4.1.2 This Agreement is executed and delivered by Shareholders legally andappropriately. This Agreement constitutes legal and binding obligations on Shareholdersand is enforceable against in accordance with its terms
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   and conditions. 4.1.3 The Shareholders are the enrolled legal owner of the Option Equity as of theeffective date of this Agreement, and except the encumbrances created by this Agreement,the Shareholders’ Voting Rights Proxy Agreement entered into by Shareholders, CGENDigital and CGEN Culture dated **January 5 2008**(the “**Proxy Agreement**”), the Equity PledgeAgreement entered into by Shareholders, CGEN Digital and CGEN Culture dated **January 52008**(the “**Equity Pledge Agreement**”), there is no lien, pledge, claim, other encumbrancesand third party rights on the Option Equity. In accordance with this Agreement, CGENDigital and/or other entity or individual designated by it is able to , after theExercise of Option, obtain the proper title to the Transferred Equity free from any lien,pledge, claim, other encumbrances and third party rights.  4.1.4 CGEN Culture shall obtain complete Business Permits as necessary for itsoperations upon this Agreement taking effect, and CGEN Culture shall have sufficientrights and qualifications to operate within PRC the businesses of advertising service andother business relating to its current business structure. CGEN Culture has conducted itsbusiness legally since its establishment and has not incurred any cases which violate ormay violate the regulations and requirements set forth by the departments of commerce andindustry, tax, culture, news, quality technology supervision, labor and social securityand other governmental departments or any disputes in respect of breach of contract.**Article 5 — Undertakings by the Shareholders**5.1 The Shareholders hereby severally undertake that, within the term of this Agreement, it musttake all necessary measures to ensure that CGEN Culture is able to obtain all Business Permitsnecessary for its business in a timely manner and all Business Permits remain in effect at anytime. Without prior written consent by CGEN Digital, if the business term of CGEN Culture isto expire during the term of this Agreement, Shareholders shall take all necessary measures toextend the business term to ensure it expires at the end of the term of this Agreement. 5.2 Unless otherwise stipulated by applicable PRC Law, during the term of the Agreement, theShareholders hereby severally undertake within the term of this Agreement that without priorwritten consent by CGEN Digital, 5.2.1 no Shareholders shall transfer or otherwise dispose of any Option Equity orcreate any encumbrance or other third party rights on any Option
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   Equity; 5.2.2 it shall not increase or decrease CGEN Culture Registered Capital or castaffirmative vote regarding the aforesaid increase or decrease in registered capital;  5.2.3 it shall not dispose of or cause the management of CGEN Culture to dispose ofany of the CGEN Culture Assets (except as occurs during the arm’s length operations);  5.2.4 it shall not terminate or cause the management of CGEN Culture to terminate anyMaterial Agreements entered into by CGEN Culture, or enter into any other MaterialAgreements in conflict with the existing Material Agreements;  5.2.5 it shall not individually or collectively cause CGEN Culture to conduct anytransactions that may substantively affect the assets, liability, business operation,equity structure, equity of a third party and other legal rights (except those occurringduring the arm’s length operations or daily operation, or having been disclosed to andapproved by CGEN Digital in writing);  5.2.6 it shall not appoint or replace any executive director or members of board ofdirectors (if any), supervisors or any other management personnel of CGEN Culture who isrequired to appoint or dismiss by the Shareholders;  5.2.7 it shall not announce the distribution of or in practice release anydistributable profit, dividend or share profit or cast affirmative votes regarding theaforesaid distribution or release;  5.2.8 it shall ensure that CGEN Culture validly exist and prevent it from beingterminated, liquidated or dissolved;  5.2.9 it shall not amend the Articles of Association of CGEN Culture or castaffirmative votes regarding such amendment;  5.2.10 it shall ensure that CGEN Culture shall not lend or borrow any loan, or provideguarantee or engage in security activities in any other forms, or bear any substantialobligations other than on the arm’s length basis.5.3 The Shareholders hereby severally undertake that, during the term of this Agreement, todevelop the business of CGEN Culture at its best affect, and ensure that the operations ofCGEN Culture are legitimate and in compliance with the regulations and that it shall notengage in any actions or omissions which
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  might harm CGEN Culture Assets or its credit standing or affect the validity of BusinessPermits of CGEN Culture.5.4 CGEN Culture undertakes that, before CGEN Digital exercises the Option and acquire all equityof CGEN Culture, CGEN Culture shall not do the following: 5.4.1 Sell, transfer, mortgage or dispose by other way any assets, business, revenue orother legal rights of its own, or permit creating any encumbrance or other third party’sinterest on such assets, business, revenue or other legal rights (except for as occursduring the arm’s length operations or daily operation, or as is disclosed to CGENDigital and approved by CGEN Digital in writing);  5.4.2 conduct any transactions that may materially affect the asset, liability, businessoperation, equity structure, equity of a third party and other legal rights (except forthose occurring during the arm’s length operations or daily operation, or having beendisclosed to CGEN Digital and approved by CGEN Digital in writing);  5.4.3 release any dividend or share profit to Shareholders in any form.**Article 6 — Confidentiality**6.1 Notwithstanding the termination of this Agreement, the Shareholders shall be obligated tokeep in confidence the following information (hereinafter collectively the “**ConfidentialInformation**”): (i) information on the execution, performance and the contents of this Agreement;  (ii) the commercial secret, proprietary information and customer information in relationto CGEN Digital known to or received by it as the result of execution and performance ofthis Agreement; and  (iii) the commercial secrets, proprietary information and customer information inrelation to CGEN Culture known to or received by it as the shareholder of CGEN Culture.  The Shareholders may use such Confidential Information only for the purpose of performing itsobligations under this Agreement. No Shareholders shall disclose the above ConfidentialInformation to any third parties without written consent from CGEN Digital, or they shall bearthe default liability and indemnify losses caused.6.2 Upon termination of this Agreement, both Shareholders shall, upon request of CGEN Digital,return, destroy or otherwise dispose of all the documents,
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  materials or software containing the Confidential Information and cease using suchConfidential Information.6.3 Notwithstanding any other provisions herein, the validity of this Article shall not beaffected by the suspension or termination of this Agreement.**Article 7 — Term of Agreement**7.1 Subject to Article 7.2 and 7.3 herein, this Agreement shall take effect from the date offormal execution by the Parties with the term of ten (10) years, unless the Parties terminatethe Agreement with written agreement in advance, or the Parties terminate the Agreement inaccordance with Article 9.1 of this Agreement. Upon the expiration of this Agreement, theAgreement will be automatically renewed for one (1) year, unless CGEN Digital gives the otherParties written notice of its intention not renew at least thirty (30) days prior toexpiration.7.2 In respect of the Shareholder, when it transfers all of its Option Equity for all the equityinterest they held in CGEN Culture to CGEN Digital and/or other entity or individualdesignated by it in accordance with this Agreement, the Agreement for such shareholder in itscapacity as the shareholder of CGEN Culture is terminated. After termination of this Agreementin respect to such Shareholder according to this Article, this Agreement continues to be fullyvalid in respect to the other Shareholders.7.3 During the term of this Agreement, should the business term of CGEN Culture terminate by anyreason; this Agreement to CGEN Culture and Shareholders (to the extent that it acts as theshareholder of CGEN Culture) is terminated.**Article 8 — Notice**8.1 Any notice, request, demand and other correspondences made as required by or in accordancewith 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 deliveredwhen it is transmitted if transmitted by facsimile; it shall be deemed to have been deliveredwhen it is delivered if received in person; it shall be deemed to have been delivered five (5)days after posting if posted by mail.**Article 9 — Liability for Breach of Contract**9.1 The Parties agree and confirm that, if any party (hereinafter the “**Defaulting Party**”)materially breaches any of the provisions herein or materially omits to perform any of theobligations hereunder, such a breach or omission shall
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  constitute a default under this Agreement (hereinafter a “**Default**”). The non-defaulting Partyshall have the right to require the Defaulting Party to rectify such Default or take remedialmeasures within a reasonable period. If the Defaulting Party fails to rectify such Defaultor take remedial measures within such reasonable period or within ten (10) days ofnon-defaulting Party’s notifying the Defaulting Party in writing and requiring it to rectifythe Default, then non-defaulting Party shall have the right at its own discretion to selectany of the following remedial measures: (1) to terminate this Agreement and require theDefaulting Party to indemnify it for all the damage; or (2) specific performance of theobligations of the Defaulting Party hereunder and require the Defaulting Party to indemnifyit for all the damage.9.2 The Parties agree and confirm that in no circumstances shall the Shareholders request thetermination of this Agreement for any reason, except otherwise stipulated by law or thisAgreement.9.3 Notwithstanding any other provisions herein, the validity of this Article shall standdisregarding the suspension or termination of this Agreement.**Article 10 — Miscellaneous**10.1 This Agreement shall be produced in the Chinese language in four (4) original copies, witheach Party holding one (1) copy hereof.10.2 The formation, validity, execution, amendment, interpretation and termination of thisAgreement shall be governed by PRC Law.10.3 Any disputes arising hereunder and in connection herewith shall be settled throughconsultations among the Parties to the dispute, and if the Parties to the dispute cannot reachan agreement regarding such disputes within thirty (30) days of their occurrence, suchdisputes shall be submitted to China International Economic and Trade Arbitration Commissionfor arbitration in Shanghai in accordance with the arbitration rules of such Commission, andthe 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 notpreclude any other rights, powers and remedies enjoyed by such Party in accordance with lawsand other provisions under this Agreement, and the exercise of its rights, powers and remediesby a Party shall not preclude its exercise of its other rights, powers and remedies by suchParty.10.5 Any failure or delay by a Party in exercising any of its rights, powers and remedieshereunder or in accordance with laws (hereinafter the “**Party’s Rights**”) shall not lead to awaiver of such rights, and the waiver of any single
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  or partial exercise of the Party’s Rights shall not preclude such Party from exercising suchrights 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 nocircumstances shall be used or affect the interpretation of the provisions hereof.10.7 Each provision contained herein shall be severable and independent to each of otherprovisions, and if at any time any one or more articles herein become invalid, illegal orunenforceable, the validity, legality or enforceability of the remaining provisions hereinshall not be affected as a result thereof.10.8 Upon execution, this Agreement shall substitute any other legal documents previously executedby the Parties on the same subject.10.9 Any amendments or supplements to this Agreement shall be made in writing and shall takeeffect only when properly executed by the Parties to this Agreement.10.10 Without prior written consent by CGEN Digital, the Shareholders shall not assign it rightsand/or obligation under this Agreement to any third party. CGEN Digital shall have the rightto assign to any third party designated by it any of its right and/or obligation under thisAgreement after giving notice to the Shareholders.10.11 This Agreement shall be binding on legal successors of the Parties.[ The remainder of this page is left blank.]
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**IN WITNESS HEREOF**, the following Parties have caused this Call Option Agreement to be executed asof the date and in the place first here above mentioned.**Shanghai Focus Media Advertisement Co., Ltd.**