Document:

EX-10.165 CALL OPTION AGREEMENT

 

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 Republic
of 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 Advertising
Agency”)
	 
	 	 	Registered Address: Room A65, 28th Floor, No. 369, Changning Road, Changning
District, Shanghai
	 
	(3)	 	CGEN Digital Technology (Shanghai) Company Ltd. (hereinafter “CGEN Digital”)
	 
	 	 	Registered Address: Room 2207, Building 2, 200 Zhangheng Road, Zhangjiang High Technology
Park, 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 individually
referred to as a “Shareholder” and collectively, “Shareholders”. Shareholders, CGEN Digital and
CGEN Culture hereinafter shall be individually referred to as a “Party” and collectively referred
to as “Parties”.)

WHEREAS:

	(1)	 	Shareholders are enrolled shareholders of CGEN Culture, legally holding all the equity of the
company as of the execution date of this Agreement, of which Focus Media Advertisement holds
90% interest and Focus Media Advertising Agency holds 10%.
	 
	(2)	 	Subject to non-violation of PRC Law, the Shareholders intend to transfer to CGEN Digital, and
CGEN 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 jointly
grant CGEN Digital an irrevocable call option for equity transfer (hereinafter the “Call
Option”), under which and to the extent permitted by PRC Law, the Shareholders shall on
request of CGEN Digital transfer the Option Equity (as defined below) to CGEN Digital and/or
any other entity or individual designated by it in accordance with the provisions contained
herein.

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 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.

“Option Equity” shall mean, in respect of each of the Shareholders, all of the equity interest held
thereby in CGEN Culture Registered Capital (as defined below); (in respect of Focus Media
Advertisement, means the 90% equity it holds in CGEN Culture and in respect of Focus Media
Advertising 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 date
of this Agreement, which shall include any increased registered capital as the result of any
capital increase taking place within the term of this Agreement.

“Transferred Equity” shall mean the equity of CGEN Culture which CGEN Digital has the right to
request the Shareholders to transfer to it or its designated entity or individual when CGEN Digital
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 CGEN Digital at its sole discretion in accordance with the then valid PRC Law and
its commercial consideration.

“Transfer Price” shall mean all the consideration that CGEN Digital or its designated entity or
individual is required to pay to the Shareholders in order to obtain the Transferred Equity upon
each Exercise of Option. Upon each Exercise of Option of CGEN Culture by CGEN Digital, all the
Transfer Price that CGEN Digital or its designated entity or individual shall pay to the
Shareholders shall be calculated by multiplying the ratio of such Option Equity to the registered
capital of CGEN Culture

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with the total amount of the registered capital of CGEN Culture. If any regulatory provision
restricts Transfer Price under then PRC Law, CGEN Digital or its designated entity or individual
shall 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 CGEN
Culture is required to have for legally and validly operating its advertisement designing,
producing, agency, publishing and any other businesses, including but not limited to Business
License of the Corporate Legal Person, Tax Registration Certificate and any other relevant licenses
and permits as required by then PRC Law.

“CGEN Culture Assets” shall mean all the tangible and intangible assets which CGEN Culture owns or
has the right to use during the term of this Agreement, including but not limited to any real
estate and moveable assets, intellectual property rights as trademarks, copyrights, patents,
proprietary know-how, domain names and software use rights, and other documents, files and material
such as client information and database.

“Material Agreement” shall mean an agreement to which CGEN Culture is a party and which has a
material 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 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 any 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 Parties hereby agree to irrevocably and with no additional condition grant CGEN Digital an
exclusive Call Option, under which CGEN Digital have the right to request the Shareholders to
transfer the Option Equity to CGEN Digital or its designated entity or individual in the
method set out herein and as permitted by PRC Law. CGEN Digital also agrees to accept such
Call 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 it
to hold all the equity interest of CGEN Culture, then CGEN Digital shall have the right to
elect to exercise all of its Call Option at once, where CGEN Digital and/or other entity or
individual 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 to
hold only part of the equity in CGEN Culture, CGEN Digital 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 then PRC Law (hereinafter the “Shareholding Threshold”), where
CGEN Digital and/or other entity or individual designated by it shall accept such amount of
Transferred Equity from the Shareholders. In the latter case, CGEN Digital 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 Threshold, with a view to ultimately acquiring all the
Option Equity.
	 
	3.3	 	At each Exercise of Option by CGEN Digital, each of the Shareholders shall transfer their
respective equity in CGEN Culture to CGEN Digital and/or other entity or individual designated
by it respectively in accordance with the amount required in the Exercise Notice stipulated in
Article 3.5. CGEN Digital and other entity or individual designated by it shall pay the
Transfer Price to each of the Shareholders who has transferred the Transferred Equity
accepted in each Exercise of Option. If permitted by PRC Law, CGEN Digital shall have the
right to set-off the Transfer Price with its/its affiliates’ credit rights (if any) against
the Shareholders.
	 
	3.4	 	In each Exercise of Option, CGEN Digital 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, CGEN Digital shall issue a notice for exercising the
Call Option to the Shareholders (hereinafter the “Exercise Notice”, the form of which is set
out 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 CGEN
Digital and/or other entity or individual designated by CGEN Digital in the method as
described in Article 3.3 herein.
	 
	3.6	 	The Shareholders hereby severally undertake and guarantee that once CGEN Digital issues the
Exercise 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 all
other necessary actions to agree to the transfer of all the Call Option to CGEN
Digital and/or other entity or individual designated by it at the Transfer Price and
waive the possible preemption rights;

	 	3.6.2	 	it shall immediately enter into an equity transfer agreement with CGEN Digital
and/or other entity or individual designated by it for transfer of all the Transferred
Equity to CGEN Digital and/or other entity or individual designated by it at the
Transfer Price; and
	 
	 	3.6.3	 	it shall provide CGEN Digital 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 CGEN Digital and of the laws and regulations, in order that CGEN
Digital and/or other entity or individual designated by it takes all the Transferred
Equity free from any legal defect.

	3.7	 	At the meantime of this Agreement, the Shareholders shall respectively enter into a power of
attorney (hereinafter the “Power of Attorney”, the form of which is set out as Appendix II
hereto), authorizing in writing any person designated by CGEN Digital to, on behalf of such
Shareholder, to enter into any and all of the legal documents in accordance with this
Agreement so as to ensure that CGEN Digital and/or other entity or individual designated by it
take all the Transferred Equity free from any legal defect. Such Power of Attorney shall be
delivered 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 and
deliver 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 and
CGEN Culture as follows:

	 	4.1.1	 	Each of Shareholders is a limited liability corporation duly registered and
validly existing under PRC Law with complete and independent status as a legal person and
has appropriate authorisation to execute, deliver and perform this Agreement, and is
capable of acting independently as a subject of legal actions.
	 
	 	4.1.2	 	This Agreement is executed and delivered by Shareholders legally and
appropriately. This Agreement constitutes legal and binding obligations on Shareholders
and 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 the
effective date of this Agreement, and except the encumbrances created by this Agreement,
the Shareholders’ Voting Rights Proxy Agreement entered into by Shareholders, CGEN
Digital and CGEN Culture dated January 5 2008 (the “Proxy Agreement”), the Equity Pledge
Agreement entered into by Shareholders, CGEN Digital and CGEN Culture dated January 5
2008 (the “Equity Pledge Agreement”), there is no lien, pledge, claim, other encumbrances
and third party rights on the Option Equity. In accordance with this Agreement, CGEN
Digital and/or other entity or individual designated by it is able to , after the
Exercise 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 its
operations upon this Agreement taking effect, and CGEN Culture shall have sufficient
rights and qualifications to operate within PRC the businesses of advertising service and
other business relating to its current business structure. CGEN Culture 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.

Article 5 — Undertakings by the Shareholders

	5.1	 	The Shareholders hereby severally undertake that, within the term of this Agreement, it must
take all necessary measures to ensure that CGEN Culture is able to obtain all Business Permits
necessary for its business in a timely manner and all Business Permits remain in effect at any
time. Without prior written consent by CGEN Digital, if the business term of CGEN Culture is
to expire during the term of this Agreement, Shareholders shall take all necessary measures to
extend 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, the
Shareholders hereby severally undertake within the term of this Agreement that without prior
written consent by CGEN Digital,

	 	5.2.1	 	no Shareholders shall transfer or otherwise dispose of any Option Equity or
create 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 cast
affirmative 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 of
any 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 any
Material Agreements entered into by CGEN Culture, or enter into any other Material
Agreements in conflict with the existing Material Agreements;
	 
	 	5.2.5	 	it shall not individually or collectively cause CGEN Culture to conduct any
transactions that may substantively affect the assets, liability, business operation,
equity structure, equity of a third party and other legal rights (except those occurring
during the arm’s length operations or daily operation, or having been disclosed to and
approved by CGEN Digital in writing);
	 
	 	5.2.6	 	it shall not appoint or replace any executive director or members of board of
directors (if any), supervisors or any other management personnel of CGEN Culture who is
required to appoint or dismiss by the Shareholders;
	 
	 	5.2.7	 	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;
	 
	 	5.2.8	 	it shall ensure that CGEN Culture validly exist and prevent it from being
terminated, liquidated or dissolved;
	 
	 	5.2.9	 	it shall not amend the Articles of Association of CGEN Culture or cast
affirmative votes regarding such amendment;
	 
	 	5.2.10	 	it shall ensure that CGEN Culture shall not lend or borrow any loan, 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 Shareholders hereby severally undertake that, during the term of this Agreement, to
develop the business of CGEN Culture at its best affect, and ensure that the operations of
CGEN Culture are legitimate and in compliance with the regulations and that it shall not
engage in any actions or omissions which

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	 	 	might harm CGEN Culture Assets or its credit standing or affect the validity of Business
Permits of CGEN Culture.

	5.4	 	CGEN Culture undertakes that, before CGEN Digital exercises the Option and acquire all equity
of CGEN Culture, CGEN Culture shall not do the following:

	 	5.4.1	 	Sell, transfer, mortgage or dispose by other way any assets, business, revenue or
other legal rights of its own, or permit creating any encumbrance or other third party’s
interest on such assets, business, revenue or other legal rights (except for as occurs
during the arm’s length operations or daily operation, or as is disclosed to CGEN
Digital and approved by CGEN Digital in writing);
	 
	 	5.4.2	 	conduct any transactions that may materially affect the asset, liability, business
operation, equity structure, equity of a third party and other legal rights (except for
those occurring during the arm’s length operations or daily operation, or having been
disclosed 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 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 CGEN Digital 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 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 its
obligations under this Agreement. No Shareholders shall disclose the above Confidential
Information to any third parties without written consent from CGEN Digital, or they shall bear
the 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 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	 	Subject to Article 7.2 and 7.3 herein, this Agreement shall take effect from the date of
formal execution by the Parties with the term of ten (10) years, unless the Parties terminate
the Agreement with written agreement in advance, or the Parties terminate the Agreement in
accordance with Article 9.1 of this Agreement. Upon the expiration of this Agreement, the
Agreement will be automatically renewed for one (1) year, unless CGEN Digital gives the other
Parties written notice of its intention not renew at least thirty (30) days prior to
expiration.

	7.2	 	In respect of the Shareholder, when it transfers all of its Option Equity for all the equity
interest they held in CGEN Culture to CGEN Digital and/or other entity or individual
designated by it in accordance with this Agreement, the Agreement for such shareholder in its
capacity as the shareholder of CGEN Culture is terminated. After termination of this Agreement
in respect to such Shareholder according to this Article, this Agreement continues to be fully
valid in respect to the other Shareholders.

	7.3	 	During the term of this Agreement, should the business term of CGEN Culture terminate by any
reason; this Agreement to CGEN Culture and Shareholders (to the extent that it acts as the
shareholder of CGEN Culture) is terminated.

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 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 the
obligations hereunder, such a breach or omission shall

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	 	 	constitute a default under this Agreement (hereinafter a “Default”). The non-defaulting Party
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) specific 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 Shareholders request the
termination of this Agreement for any reason, except otherwise stipulated by law or this
Agreement.

	9.3	 	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 produced in the Chinese language in four (4) original copies, with
each Party holding one (1) copy hereof.

	10.2	 	The formation, validity, execution, amendment, interpretation and termination of this
Agreement shall be governed by 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
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

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	 	 	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 be used or affect the interpretation of the provisions hereof.

	10.7	 	Each provision contained herein shall be severable and independent to 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.

	10.9	 	Any amendments or supplements to this Agreement shall be made in writing and shall take
effect 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 rights
and/or obligation under this Agreement to any third party. CGEN Digital shall have the right
to assign to any third party designated by it any of its right and/or obligation under this
Agreement 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 as
of the date and in the place first here above mentioned.

Shanghai Focus Media Advertisement Co., Ltd.

(chop)

Signature by Authorized Representative:                                         

Name: Jiang Nanchun

Position: Legal Representative

Shanghai Focus Media Advertising Agency Co., Ltd

(chop)

Signature by Authorized Representative:                                         

Name: Jiang Nanchun

Position: Legal Representative

CGEN Digital Technology (Shanghai) Co., Ltd.

(chop)

Signature by Authorized Representative:                                         

Name:

Position:

Shanghai CGEN Culture Communication Co., Ltd

(chop)

Signature by Authorized Representative:                                         

Name: Yang Deyi

Position: Legal Representative

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Appendix I:

Format of the Option Exercise Notice

To: [Name of the Shareholder(s)]

As per the Call Option Agreement as of [               ], 2008 executed among your company and other
relevant parties (hereinafter the “Option Agreement”), it has been agreed that, subject to
permission of PRC Laws and regulations, your company shall transfer the equity your company hold in
Shanghai CGEN Culture Communication Co., Ltd (hereinafter the “CGEN Culture”) to our company or any
third party or parties designated by our company on request of our company,

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

Our company hereby requests to exercise the Call Option under the Option Agreement and [our
company]/[name of company/individual] designated by our company shall accept the equity your
company hold accounting for           % of CGEN Culture Registered Capital (hereinafter the “Proposed
Accepted Equity”). Your company 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,

	 	 	 	 	 
	 	 CGEN Digital Technology (Shanghai) Co., Ltd.

  (Chop)

  Authorized Representative: _______________

  Date: __________________
 	 

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Appendix II:

Form of the Power of Attorney

Our company hereby irrevocably entrusts [               ] [Identity Card number:                          ] , as
the authorized representative of our company, to sign the Equity Transfer Agreement between our
company and CGEN Digital Technology (Shanghai) Co., Ltd. regarding the Equity Transfer of Shanghai
CGEN Culture Communication Co., Ltd. and other relevant legal documents.

Our company hereby confirms that once the Equity Transfer Agreement between our company and CGEN
Digital Technology (Shanghai) Co., Ltd. regarding the Equity Transfer of Shanghai CGEN Culture
Communication Co., Ltd. and other relevant legal documents are signed by the entrusted
representative for and on behalf of our company, such agreement and other relevant legal documents
constitute legal and binding obligations on our company.

	 	 	 	 	 
	 	Shanghai Focus Media Advertisement Co., Ltd.

  (Chop)

  Signature: _______________

  Date: ___________________

 	 

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Form of the Power of Attorney

Our company hereby irrevocably entrusts [               ] [Identity Card number:                          ] , as the
authorized representative of our company, to sign the Equity Transfer Agreement between our company
and CGEN Digital Technology (Shanghai) Co., Ltd. regarding the Equity Transfer of Shanghai CGEN
Culture Communication Co., Ltd. and other relevant legal documents.

Our company hereby confirms that once the Equity Transfer Agreement between our company and CGEN
Digital Technology (Shanghai) Co., Ltd. regarding the Equity Transfer of Shanghai CGEN Culture
Communication Co., Ltd. and other relevant legal documents are signed by the entrusted
representative for and on behalf of our company, such agreement and other relevant legal documents
constitute legal and binding obligations on our company.

	 	 	 	 	 
	 	Shanghai Focus Media Advertising Agency Co., Ltd.

  (Chop)

  Signature: _______________

  Date: ___________________

 	 

15EX-10.166 SHAREHOLDERS' VOTING RIGHTS AGREEMENT

 

Exhibit 10.166

Confidential

 

 

SHAREHOLDERS’ VOTING RIGHTS

PROXY 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

 

 

 

 

SHAREHOLDERS’ VOTING RIGHTS PROXY AGREEMENT

This Shareholders’ Voting Rights Proxy Agreement (this “Agreement”) is entered into in Shanghai of
the People’s Republic of China (hereinafter “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 Advertising
Agency”)
	 
	 	 	Registered Address: Room A65, 28th Floor, No. 369, Changning Road, Changning
District, Shanghai
	 
	(3)	 	CGEN Digital Technology (Shanghai) Company Ltd. (hereinafter “CGEN Digital”)
	 
	 	 	Registered Address: Room 2207, Building 2, 200 Zhangheng Road, Zhangjiang High Technology Park,
Shanghai
	 
	(4)	 	Shanghai CGEN Culture Communication Company Ltd (hereinafter “CGEN Culture”)
	 
	 	 	Registered Address: Unit A, F4, North Tower, 1016 Dingxi Road, Changning District, Shanghai

(The above parties hereinafter shall be individually referred to as a “Party” and collectively
referred to as the “Parties”, of which Focus Media Advertisement and Focus Media Advertising Agency
shall be individually referred to as a “Shareholder” and collectively referred to as the
“Shareholders”.)

WHEREAS:

	1.	 	As of the date of the Agreement, Shareholders are the enrolled shareholders of CGEN Culture,
legally holding all the equity of the company as of the execution date of this Agreement, of
which Focus Media Advertisement holds 90% interest and Focus Media Advertising Agency holds
10%.

	2.	 	The Shareholders intend to severally entrust the individual designated by CGEN Digital with
the exercises of their voting rights in CGEN Culture and CGEN 

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	 	 	Digital is willing to designate
such an individual to accept the entrustment.

The Parties hereby have reached the following agreement upon friendly consultations:

Article 1 Voting Rights Entrustment

	1.1	 	The Shareholders hereby irrevocably undertake to respectively sign an Entrustment Letter
after execution of the Agreement to respectively entrust the individual designated by CGEN
Digital (hereinafter, the “Trustees”) to exercise the following rights respectively enjoyed by
them as shareholders of CGEN Culture in accordance with then effective articles of association
of CGEN Culture (collectively, the “Entrusted Rights”):

	 	(1)	 	Proposing to convene and attending shareholders’ meetings of CGEN Culture as proxy
of the Shareholders according to the articles of association of CGEN Culture;
	 
	 	(2)	 	Exercising voting rights as proxy of the Shareholders on matters discussed and
resolved by the shareholders’ meeting of CGEN Culture, including but not limited to the
appointment and election of senior management personnel of CGEN Culture such as
directors, supervisors, general manager, deputy general manager, financial officer.

The above authorization and entrustment is granted subject to the status of Trustees to be PRC
citizens and the approval by CGEN Digital. Upon and only upon written notice of dismissing and
replacing Trustee(s) given by CGEN Digital to the Shareholders, the Shareholders shall
promptly entrust another PRC citizen then designated by CGEN Digital to exercise the above
Entrusted Rights, and once new entrustment is made, the original entrustment shall be replaced
with immediate effect; the Shareholders shall not withdraw the authorization and entrustment
of the Trustee(s) otherwise.

	1.2	 	The Trustees shall perform the entrusted obligation within the scope of entrustment in due
care and prudence and in compliance with laws; the Shareholders acknowledge and assume
relevant liabilities for any legal consequences of the Trustees’ exercise of the foregoing
Entrusted Rights.

	1.3	 	The Shareholders hereby acknowledge that the Trustees are not required to seek advice from
the Shareholders prior to their respective exercise of the foregoing Entrusted Rights.
However, the Trustees shall inform the Shareholders in a timely manner of any resolution or
proposal on convening interim shareholders’ meeting after such resolution or proposal is made.

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Article 2 Right to Information

For the purpose of exercising the Entrusted Rights under this Agreement, the Trustees are entitled
to know the information with regard to CGEN Culture’s operation, business, clients, finance, staff,
etc., and shall have access to relevant materials of CGEN Culture. CGEN Culture shall adequately
cooperate with the Trustees in this regard.

Article 3 Exercise of Entrusted Rights

	3.1	 	The Shareholders will provide adequate assistance to the exercise of the Entrusted Rights by
the Trustees, including execution of resolutions of the shareholders’ meeting of CGEN Culture
or other pertinent legal documents made by the Trustees when necessary (e.g., to satisfy
governmental requirements in case of examination and approval of or registration or filing ).

	3.2	 	If at any time during the term of this Agreement, the entrustment or exercise of the
Entrusted Rights under this Agreement is unenforceable for any reason except for default of
any Shareholder or CGEN Culture, the Parties shall immediately seek a most similar substitute
for the unenforceable provision and, if necessary, enter into supplementary agreement to amend
or adjust the provisions herein, in order to ensure the realization of the purpose of this
Agreement.

Article 4 Exemption and Compensation

	4.1	 	The Parties acknowledge that CGEN Digital shall not be requested to be liable for or
compensate (monetary or otherwise) other Parties or any third party due to exercise of
Entrusted Rights by the Trustees designated by CGEN Digital under this Agreement.

	4.2	 	CGEN Culture and the Shareholders agree to indemnify CGEN Digital and hold it harmless
against all of its losses incurred or likely to incur due to exercise of the Entrusted Rights
by the Trustees designated by CGEN Digital, including without limitation any loss resulting
from any litigation, demand, arbitration or claim initiated or raised by any third party
against it or from administrative investigation or penalty of governmental authorities.
However, the Shareholders and CGEN Culture will not compensate for losses incurred due to
wilful misconduct or gross negligence of CGEN Digital.

Article 5 Representations and Warranties

	5.1	 	Each of the Shareholders hereby respectively represents and warrants that:

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	 	5.1.1	 	Each of Shareholders is a limited liability corporation duly registered
and validly existing under PRC Law with complete and independent status as a
legal person and appropriate authorisation to execute, deliver and perform this
Agreement, and is capable of acting independently as a subject of legal
actions..
	 
	 	5.1.2	 	The Shareholders have full internal corporate right and authorization to
execute and deliver this Agreement and other documents relating to the transaction
as contemplated in this Agreement. It also has full right and authorization to
complete the transaction stipulated in this Agreement.
	 
	 	5.1.3	 	The Shareholders are enrolled and legal shareholders of CGEN Culture as
of the effective date of this Agreement, and except the rights created by this
Agreement, the Call Option Agreement (the “Call Option Agreement”) as well as the
Equity Pledge Agreement (the “Equity Pledge Agreement”) entered into by CGEN
Digital, CGEN Culture and them on January 5 2008, there exists no third party right
on the Entrusted Rights. Pursuant to this Agreement, the Trustees is capable to
fully and sufficiently exercise the Entrusted Rights in accordance with then
effective articles of association of CGEN Culture.

	5.2	 	CGEN Culture hereby represents and warrants that:

	 	5.2.1	 	It is a company with limited liability duly registered and legally
existing under PRC laws with complete and independent status as a legal person and
has apporpriate authorisation to execute, deliver and perform this Agreement and is
capable of acting independently as a subject of legal actions.
	 
	 	5.2.2	 	It has the full corporate power and authority to execute and deliver
this Agreement and all the other documents to be entered into by it in relation to
the transaction contemplated hereunder, and has the full power and authority to
consummate such transaction.
	 
	 	5.2.3	 	The Shareholders are enrolled shareholders as of the effective date of
this Agreement, of which Focus Media Advertisement holds 90% interest while Focus
Media Advertising Agency holds 10%. Except rights created by this Agreement, the
Equity Pledge Agreement and the Call Option Agreement, there exists no third party
right on the Entrusted Rights. Pursuant to this Agreement, the Trustees may fully
and sufficiently exercise the Entrusted Rights in accordance with then effective
articles of association of CGEN Culture.

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	 	5.2.4	 	Considering the fact that the Shareholders of CGEN Culture will set
aside all the equity interest held thereby in CGEN Culture as security to secure the
performance of the contractual obligations by CGEN Culture under the Call Option
Agreement, CGEN Culture undertakes to, during the valid term of this Agreement, make
full and due performance of any and all obligations under Call Option Agreement, and
warrant that no adverse impact on the exercise of the Entrusted Rights hereunder by
the Trustees will be incurred due to the breach of the Call Option Agreement by CGEN
Culture.

Article 6 Term of Agreement

	6.1	 	Subject to Article 6.2 and 6.3 herein, this Agreement shall take effect as of the date of
formal execution by the Parties with the term of ten (10) years, unless the Parties terminate
the Agreement with written agreement in advance, or the Parties terminate the Agreement in
accordance with Article 8.1 of this Agreement. Upon the expiration of this Agreement, the
Agreement will be automatically renewed for one (1) year, unless CGEN Digital gives the other
Parties written notice of its intention of not renew at least thirty (30) days prior to
expiration.

	6.2	 	In case that a Shareholder transfers all of the equity interest held by it in CGEN Culture
with prior consent of CGEN Digital, such Shareholder shall no longer be a Party to this
Agreement whilst the obligations and commitments of the other Parties under this Agreement
shall not be adversely affected thereby.

	6.3	 	During the term of this Agreement, should the business term of CGEN Culture terminate by any
reason; this Agreement to CGEN Culture and Shareholders is terminated.

Article 7 Notice

	7.1	 	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.

	7.2	 	The abovementioned notice or other correspondences shall be deemed to have been delivered
when it is transmitted if transmitted by facsimile, or when it is delivered if received in
person, or when five (5) days have elapsed after posting if posted by mail.

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Article 8 Default Liability

	8.1	 	The Parties agree and confirm that, if any of the Parties (the “Defaulting Party”) breaches
substantially any of the provisions herein or fails substantially to perform any of the
obligations hereunder, such a breach or failure shall constitute a default under this
Agreement (a “Default”). In such event any of the other Parties without default (a
“Non-defaulting Party”) who incurs losses arising from such a Default 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 a Non-defaulting Party’s
notifying the Defaulting Party in writing and requiring it to rectify the Default, then the
relevant Non-defaulting Party shall be entitled to choose at its discretion to (1) terminate
this Agreement and require the Defaulting Party to indemnify all damages, or (2) require
specific performance by the Defaulting Party of this Agreement and indemnifation against all
damages.

	8.2	 	The Parties agree and confirm, the Shareholders or CGEN Culture shall not request the
termination of this Agreement for whatsoever reason and under whatsoever circumstance, except
otherwise stipulated by laws or this Agreement.

	8.3	 	Notwithstanding any other provisions herein, the validity of this Article shall not be
affected by the suspension or termination of this Agreement.

Article 9 Miscellaneous

	9.1	 	This Agreement shall be prepared in Chinese language in four (4) original copies, with each
Party holding one (1) copy hereof.

	9.2	 	The conclusion, validity, execution, amendment, interpretation and termination of this
Agreement shall be governed by laws of the PRC.

	9.3	 	Any disputes arising from and in connection with this Agreement shall be settled through
consultations among the Parties involved, and if the Partiesinvolved fail to reach an
agreement regarding such a dispute within thirty (30) days of its occurrence, such dispute
shall be submitted to China International Economic and Trade Arbitration Commission for
arbitration in Shanghai in accordance with the arbitration rules of such commission, and the
arbitration award shall be final and binding on all the Parties involved.

	9.4	 	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 a

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	 	 	Party’s exercise of any of its rights, powers
and remedies shall not preclude its
exercise of other rights, powers and remedies of it.
	 
	9.5	 	Any failure or delay by a Party in exercising any of its rights, powers and remedies
hereunder or in accordance with laws (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 or exercising the remaining
part of the Party’s Rights.
	 
	9.6	 	The titles of the Articles contained herein are for reference only, and in no circumstances
shall such titles be used for or affect the interpretation of the provisions hereof.
	 
	9.7	 	Each provision contained herein shall be severable and independent from each of other
provisions. 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 thereby.
	 
	9.8	 	Upon execution, this Agreement shall replace any other previous legal documents entered into
by relevant Parties on the same subject matter.
	 
	9.9	 	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.
	 
	9.10	 	In respect of the Shareholder and CGEN Culture, they shall not assign any of their rights
and/or transfer any of their obligations hereunder to any third parties without prior written
consent from CGEN Digital; CGEN Digital shall have the right to assign any of its rights
and/or transfer any of its obligations hereunder to any third parties designated by it after
giving notice to the Shareholders.
	 
	9.11	 	This Agreement shall be binding on its legal successors of the Parties.

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IN WITNESS HEREOF, the following Parties have caused this Shareholders’ Voting Rights Proxy
Agreement to be executed as of the date and in the place first here above mentioned.

Shanghai Focus Media Advertisement Co., Ltd.

(chop)

Signature by Authorized Representative:                                         

Name: Jiang Nanchun

Position: Legal Representative

Shanghai Focus Media Advertising Agency Co., Ltd

(chop)

Signature by Authorized Representative:                                         

Name: Jiang Nanchun

Position: Legal Representative

CGEN Digital Technology (Shanghai) Co., Ltd.

(chop)

Signature by Authorized Representative:                                         

Name:

Position:

Shanghai CGEN Culture Communication Co., Ltd

(chop)

Signature by Authorized Representative:                                         

Name: Yang Deyi

Position: Legal Representative

8

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