Document:

EX-10.161 2007 SHARE OPTION PLAN

 

Exhibit 10.161

FOCUS MEDIA HOLDING LIMITED

2007 EMPLOYEE SHARE OPTION PLAN

     1. Purposes of the Plan.

          The purposes of this Employee Share Option Plan are to attract and retain the best available
personnel, to provide additional incentive to Employees, Directors and Consultants and to promote
the success of the Company’s business.

     2. Definitions.

          As used herein, the following definitions shall apply:

          2.1 “Administrator” means the Board or any of the Committees appointed to administer the Plan.

          2.2 “Applicable Laws” means the legal requirements relating to the administration of share
incentive plans, if any, under applicable provisions of the U.S. federal securities laws, the U.S.
state corporate and securities laws, the Code, the rules of any applicable stock exchange or
national market system, and the laws and rules of any jurisdiction outside the U.S. applicable to
Options, SARs or Restricted Shares granted to residents therein.

          2.3 “Board” means the Board of Directors of the Company.

          2.4 “Code” means the U.S. Internal Revenue Code of 1986, as amended.

          2.5 “Committee” means any committee appointed by the Board to administer the Plan, and
initially the Compensation Committee of the Company, provided that the Committee shall consist of
not fewer than two (2) members of the Board, and shall, following the Registration Date and, solely
to the extent required to comply with Applicable Laws, be composed of “non-employee” directors
within the meaning of Rule 16b-3 as promulgated under the Exchange Act and “outside directors”
within the meaning of the Code. To the extent the Plan is administered by the Board, the term
“Committee” shall refer to the Board.

          2.6 “Company” means Focus Media Holding Limited, a company incorporated under the laws of the
Cayman Islands.

          2.7 “Consultant” means any person (other than an Employee or a Director) who is engaged by the
Company or any Related Entity to render consulting or advisory services to the Company or such
Related Entity or any other selective persons the Administrator determines provides, directly or
indirectly, bona fide value to the Company or any Related Entity. The term “Consultant” shall include any company, trust,
special purpose vehicle or other legal entity owned by such person.

 

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          2.8 “Continuous Service” means that the provision of services to the Company or a Related
Entity in any capacity of Employee, Director or Consultant, is not interrupted or terminated.
Continuous Service shall not be considered interrupted in the case of (i) any approved leave of
absence, (ii) transfers among the Company, any Related Entity, or any successor, in any capacity of
Employee, Director or Consultant, or (iii) any change in status as long as the individual remains
in the service of the Company or a Related Entity in any capacity of Employee, Director or
Consultant (except as otherwise provided in the Option Agreement). An approved leave of absence
shall include sick leave, maternity leave, or any other authorized personal leave. For purposes of
Incentive Share Options, no such leave may exceed ninety (90) days, unless re-employment upon
expiration of such leave is guaranteed by statute or contract.

          2.9 “Corporate Transaction” means any of the following transactions to which the Company is a
party:

               (i) a merger or consolidation or reorganization in which the Company is not the surviving
entity; or

               (ii) the sale, transfer or other disposition of all or substantially all of the assets of the
Company (including the share capital of the Company’s Subsidiaries).

          2.10 “Director” means a member of the Board or the board of directors of any Related Entity.

          2.11 “Disability” means that an Optionee is permanently unable to carry out the
responsibilities and functions of the position held by the Optionee by reason of any medically
determinable physical or mental impairment as determined by the Administrator. An Optionee will
not be considered to have incurred a Disability unless he or she furnishes proof of such impairment
sufficient to satisfy the Administrator in its discretion.

          2.12 “Effective Date” means the date on which a Grant of Options and/or SARs and/or Restricted
Shares shall take effect in accordance with the Option Agreement.

          2.13 “Employee” means any person, including an Officer or Director, who is an employee of the
Company or any Related Entity. The term “Employee” shall include any company, trust, special
purpose vehicle or other legal entity owned by such employee. The payment of an independent
director’s fee by the Company or a Related Entity shall not be sufficient to constitute
“employment” of such person by the Company.

          2.14 “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

          2.15 “Fair Market Value” means, as of any date, the value of Ordinary Shares as follows:

               (a) Where there exists a public market for the Ordinary Shares, the Fair Market Value shall be
(i) the closing price for a Share for the last market trading day prior to the time of the
determination (or, if no closing price was reported on that date, on the last trading date on which
a closing price was reported) on the stock exchange determined by the

 

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Administrator to be the primary market for the Ordinary Shares or the Nasdaq National Market, whichever is applicable, or
(ii) if the Ordinary Shares are not traded on any such exchange or national market system, the
average of the closing bid and asked prices of a Share on the Nasdaq Small Cap Market for the day
prior to the time of the determination (or, if no such prices were reported on that date, on the
last date on which such prices were reported), in each case, as reported in The Wall Street Journal
or such other source as the Administrator deems reliable; or

               (b) In the absence of an established market for the Ordinary Shares of the type described in
(a), above, the Fair Market Value thereof shall be determined by the Administrator in good faith by
reference to (i) the valuation price made by an independent appraiser appointed by the
Administrator; (ii) the placing price of the latest private placement of the Shares and (iii) the
development of the Company’s business operations since such latest private placement.

          2.16 “Grant” means the number of Options and/or SARs and/or Restricted Shares and/or
Restricted Share Units granted to an Optionee at any time in accordance with Section 6 hereof.

          2.17 “Immediate Family” means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships,
any person sharing the Optionee’s household (other than a tenant or employee), a trust in which
these persons (or the Optionee) have more than fifty percent (50%) of the beneficial interest, a
foundation in which these persons (or the Optionee) control the management of assets, and any other
entity in which these persons (or the Optionee) own more than fifty percent (50%) of the voting
interests.

          2.18 “Incentive Share Option” means an Option intended to qualify as an incentive share option
within the meaning of Section 422 of the Code.

          2.19 “Liquidation Event” means a complete dissolution or liquidation of the Company.

          2.20 “Non-Statutory Share Option” means an Option not intended to qualify as an Incentive
Share Option within the meaning of Section 422 of the Code.

          2.21 “Officer” means a person who is an officer of the Company or a Related Entity within the
meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder or,
to the extent applicable, other Applicable Laws.

          2.22 “Old Plans” means the Employee Share Option Schemes of the Company adopted in 2003, 2005
and 2006.

          2.23 “Option” means an option to purchase Shares pursuant to an Option Agreement granted under
the Plan, as amended.

 

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          2.24 “Optionee” means an Employee, Director or Consultant (including any company, trust,
special purpose vehicle or other legal entity owned by such Employee, Director or Consultant) who
receives a Grant under the Plan.

          2.25 “Option Agreement” means the written agreement evidencing the grant of an option and/or
SARs and/or Restricted Shares executed by the Company and the Optionee, including any amendments
thereto.

          2.26 “Option Period” means the period commencing on the Effective Date of a Grant and ending
no later than on the day prior to the tenth anniversary of such Effective Date.

          2.27 “Ordinary Share” means a share of US$0.00005 nominal or par value, of the Company, or, if
applicable, the number or fraction of American Depositary Receipt representing an Ordinary Share.

          2.28 “Parent” means a “parent corporation”, whether now or hereafter existing, as defined in
Section 424(e) of the Code or, to the extent applicable, other Applicable Laws.

          2.29 “Plan” means this 2007 Employee Share Option Plan of Focus Media Holding Limited, as
Amended and Restated as set forth herein and as may be amended from time to time.

          2.30 “Registration Date” means the first to occur of (a) the closing of the first sale to the
general public of (i) the Ordinary Shares or (ii) the same class of securities of a successor
corporation (or its Parent) issued pursuant to a Corporate Transaction in exchange for or in
substitution of the Ordinary Shares, pursuant to a registration statement filed with and declared
effective by the Securities and Exchange Commission under the Securities Act or an equivalent
thereof in a jurisdiction outside the U.S.; and (b) in the event of a Corporate Transaction, the
date of the consummation of the Corporate Transaction if the same class of securities of the
successor corporation (or its Parent) issuable in such Corporate Transaction shall have been sold
to the general public pursuant to a registration statement filed with and declared effective by the
Securities and Exchange Commission under the Securities Act or an equivalent thereof in a
jurisdiction outside the U.S., on or prior to the date of consummation of such Corporate
Transaction.

          2.31 “Related Entity” means any Parent, Subsidiary and any other corporation, partnership,
limited liability company or other business entity in which the Company, its Parent or a Subsidiary
holds a substantial ownership interest, directly or indirectly.

          2.32 “Securities Act” means the U.S. Securities Act of 1933, as amended.

          2.33 “SAR” means a stock appreciation right entitling the Grantee to Shares or cash
compensation, as established by the Administrator, measured by appreciation in the value of
Ordinary Shares.

          2.34 “Shares” mean Ordinary Shares of the Company.

 

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          2.35 “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as
defined in Section 424(f) of the Code or, to the extent applicable, other Applicable Laws.

     3. Shares Subject to the Plan.

          3.1 Subject to the provisions of Section 10.1 and any amendment of this Plan by the Board or
the Committee pursuant to Section 12 below, in the three years following the date of enactment of
this Plan, Grants of Options (including Incentive Stock Options) issued under this Plan shall not
exceed in the aggregate five percent (5%) of the issued share capital of the Company, outstanding
from time to time. In addition, the maximum aggregate number of Shares which may be issued pursuant
to all Grants (including Incentive Stock Options) shall be increased by any Shares that are
represented by awards under the Company’s Old Plans that are forfeited, expire or are cancelled
without delivery of the Shares or which result in forfeiture of the Shares back to the Company on
or after the adoption of this Plan. The Shares to be issued pursuant to Grants must be authorized,
but unissued.

          3.2 Any Shares covered by a Grant (or portion of a Grant) which is forfeited or cancelled,
expires or is settled in cash or otherwise, shall be deemed not to have been issued for purposes of
determining the maximum aggregate number of Shares which may be issued under the Plan. If any
unissued Shares are retained by the Company upon exercise of a Grant in order to satisfy the
exercise price for such Grant or any withholding taxes due with respect to such Grant, such
retained Shares subject to such Grant shall become available for future issuance under the Plan
(unless the Plan has terminated). Shares that actually have been issued under the Plan pursuant to
a Grant shall not be returned to the Plan and shall not become available for future issuance under
the Plan.

     4. Administration of the Plan.

          4.1 Plan Administrator. The Committee shall administer the Plan in accordance with its terms.

          4.2 Powers of the Administrator. Subject to Applicable Laws and the provisions of the Plan
(including any other powers given to the Administrator hereunder), and except as otherwise provided
by the Board, the Administrator shall have the authority, in its discretion:

               (a) to determine the eligibility of Grants, the classes of bands and the range of number of
Shares covered in each Band, to authorize and determine the number of shares of each Grant;

               (b) to approve forms of Option Agreements for use under the Plan;

               (c) to determine to grant Options with or without SARs;

               (d) to determine that the Options granted shall be either Incentive Share Options or
Non-Statutory Share Options or a combination thereof;

 

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               (e) to determine the exercise price applicable to the Share covered by each Option;

               (f) to determine the Option Period applicable thereto;

               (g) to establish additional terms, conditions, rules or procedures to accommodate the rules or
laws of applicable foreign jurisdictions and to afford Optionees favourable treatment under such
rules or laws; provided, however, that no Grant shall be granted under any such
additional terms, conditions, rules or procedures with terms or conditions which are inconsistent
with the provisions of the Plan;

               (h) to amend the terms of any outstanding Grant granted under the Plan;

               (i) to construe and interpret the terms of the Plan and Grants, including without limitation,
any notice of Grant or Option Agreement, granted pursuant to the Plan; and

               (j) to take such other action, not inconsistent with the terms of the Plan, as the
Administrator deems appropriate.

     5. Eligibility.

          Incentive Share Options may be granted only to Employees of the Company, a Parent or a
Subsidiary. Grants other than Incentive Share Options may be granted to Employees, Directors and
Consultants. An Employee, Director or Consultant who has been granted a Grant may, if otherwise
eligible, be granted additional Grants. Grants may be granted to such Employees, Directors or
Consultants who are residing in foreign jurisdictions as the Administrator may determine from time
to time.

     6. Type of Grants; Terms and Conditions of Grants.

          Grants under the Plan may consist of one or more of the following: Options, SARs, or
Restricted Shares (which may be granted as Restricted Share units). Awards of Restricted Shares
may provide the Optionee with dividends or dividend
equivalents and voting rights prior to vesting. Each Grant shall be designated in the Option
Agreement.

          6.1 Options.

               (a) Option Designation. In the case of an Option, the Option shall be designated as
either an Incentive Share Option or a Non-Statutory Share Option. However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of Shares subject to Options
designated as Incentive Share Options which become exercisable for the first time by an Optionee
during any calendar year (under all plans of the Company or any of its Parent or Subsidiary)
exceeds US$100,000, such excess Options, to the extent of the Shares covered thereby in excess of
the foregoing limitation, shall be treated as Non-Statutory Share Options. For this purpose,
Incentive Share Options shall be taken into account in the order in

 

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which they were granted, and
the Fair Market Value of the Shares shall be determined as of the grant date of the relevant
Option.

               (b) Option Exercise Price. The exercise price of an Option shall be the Fair Market
Value per Share on the date of grant.

               (c) Consideration. In addition to any other types of consideration the Administrator
may determine, the Administrator is authorized to accept as consideration for Shares issued under
the Plan the following: (i) cash or check in U.S. dollars (in connection therewith the
Administrator may require the Optionee to provide evidence that the funds were taken out of any
relevant non-U.S. jurisdiction in accordance with applicable foreign exchange control laws and
regulations); (ii) cancellation of indebtedness owed by the Company to the Optionee; (iii)
promissory note; (iv) Shares previously acquired by the Optionee valued at the Fair Market Value at
the time of the exercise; (v) withholding from delivery to the Optionee that number of whole Shares
having a Fair Market Value at the time of the exercise equal to the exercise price payable to the
Company upon exercise of the Option; or (vi) any combination of the foregoing methods of payment.

               (d) Easy-Sale Exercise.

               (i) Exercise/Sale. An Option Agreement may, but need not, provide that, if Shares are
publicly traded, all or part of the exercise price of an Option and any withholding taxes may be
paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to a
securities broker approved by the Company to sell Shares and to deliver all or part of the sales
proceeds to the Company.

               (ii) Exercise/Pledge. An Option Agreement may, but need not, provide that, if Shares
are publicly traded, all or part of the exercise price of an Option and any withholding taxes may
be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to pledge
Shares to a securities broker or lender approved by the Company, as security for a loan, and to
deliver all or part of the loan proceeds to the Company.

          6.2 SARs.

               (a) Grant. SARs may be granted in tandem with an Option, in addition to an Option, or
may be freestanding and unrelated to an Option. SARs granted in tandem or in addition to an Option
may be granted either at the same time as the Option or at a later time. SARs shall vest and
become exercisable at a rate determined by the Administrator, and shall remain exercisable for such
period as specified by the Administrator. A SAR shall entitle the Optionee to receive from the
Company an amount equal to the excess of the Fair Market Value of a Share on the exercise of the
SAR over the Fair Market Value of a Share on the date of grant or, in the case of an SAR granted in
tandem with an Option, the per Share exercise price applicable to such Option.

               (b) Settlement. The Administrator shall determine in its sole discretion whether the
SAR shall be settled in cash, Shares or a combination of cash and Shares. In no event may any
Optionee receive grants of SARs with respect to more than five percent (5%) of the issued share
capital of the Company in any calendar year.

 

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          6.3 Restricted Shares.

               (a) Grant. Restricted Shares may be granted in the form of Shares or share units
having a value equal to an identical number of Shares. The employment conditions and the length of
the period for vesting of Restricted Shares shall be established by the Administrator at the time
of grant. In the event that a share certificate is issued in respect of Restricted Shares, such
certificate shall be registered in the name of the Optionee but shall be held by the Company until
the end of the restricted period. During the restricted period, Restricted Shares may not be sold,
assigned, transferred or otherwise disposed of, or pledged or hypothecated as collateral for a loan
or as security for the performance of any obligation or for any other purpose as the Administrator
shall determine.

               (b) Settlement. The Administrator shall determine in its sole discretion whether
Restricted Shares granted in the form of share units shall be paid in cash, Shares, or a
combination of cash and Shares.

          6.4 Conditions of Grant; Vesting and Repurchase Right. Subject to the terms of the Plan, the
Administrator shall determine the provisions, terms, and conditions of each Grant including, but
not limited to, the Grant vesting schedule, repurchase provisions, rights of first refusal,
forfeiture provisions, form of payment (cash, Shares, or other consideration) upon settlement of
the Grant, payment contingencies, and satisfaction of any performance criteria, provided,
however, unless specifically provided otherwise in the relevant Option Agreement, a total
of one-forth (1/4th) of the Grant shall vest at the 1st anniversary following
the issuance of such Grant and, subsequently, a total of one-fourth (1/4th) of the Grant
shall vest at the end of anniversary of the 2nd, 3rd and 4th years
for so long as the Optionee provides Continuous Service to the Company, such that the entire Grant
shall be fully vested four (4) years from the date of the Grant.

          6.5 Acquisitions and Other Transactions. The Administrator may issue Grants under the Plan in
settlement, assumption or substitution for, outstanding Grants or obligations to grant future
Grants in connection with the Company or a Related Entity acquiring another entity, an interest in
another entity or an additional interest in a Related Entity whether by merger, share purchase,
asset purchase or other form of transaction.

          6.6 Deferral of Grant Payment. The Administrator may establish one or more programs under the
Plan to permit selected Optionees the opportunity to elect to defer receipt of consideration upon
exercise of a Grant, satisfaction of performance criteria, or other event that absent the election
would entitle the Optionee to payment or receipt of Shares or other consideration under a Grant.
The Administrator may establish the election procedures, the timing of such elections, the
mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, Shares
or other consideration so deferred, and such other terms, conditions, rules and procedures that the
Administrator deems advisable for the administration of any such deferral program.

          6.7 Award Exchange Programs. The Administrator may establish one or more programs under the
Plan to permit selected Optionees to exchange a Grant under the Plan

 

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for one or more other types of
Grants under the Plan on such terms and conditions as determined by the Administrator from time to
time.

          6.8 Separate Programs. The Administrator may establish one or more separate programs under
the Plan for the purpose of issuing particular forms of Grants to one or more classes of Optionees
on such terms and conditions as determined by the Administrator from time to time.

          6.9 Early Exercise. The Option Agreement may, but need not, include a provision whereby the
Optionee may elect, at any time while being an Employee, Director or Consultant, to exercise any
part or all of the Grant prior to full vesting of the Grant. Any unvested Shares received pursuant
to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity
or to any other restriction the Administrator determines to be appropriate.

          6.10 Option Period. The Option Period shall be the term stated in the Option Agreement up to
ten (10) years from the Effective Date of Grant thereof or such shorter term as may be provided in
the Option Agreement.

          6.11 Transferability of Grants. No Grant may be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee;
provided, however, during the lifetime of the Optionee, SARs may be transferred by
gift to members of the Optionee’s Immediate Family to the extent and manner determined by the
Administrator.

          6.12 Time of Grants. The date of grant of a Grant shall for all purposes be the date on which
the Administrator makes the determination to grant such Grant, or such other date as is determined
by the Administrator. Notice of the grant determination shall be given to each Employee, Director
or Consultant to whom a Grant is so granted within a reasonable time after the date of such grant.
Unless otherwise determined by the Administrator, Grants will be made twice a year.

          6.13 Buyout Provisions. The Administrator may at any time offer to buy out for a payment in
cash or Shares or other consideration, any Grant previously granted based on such terms and
conditions as the Administrator shall establish and communicate to the Optionee at the time such
offer is made.

     7. Withholding.

          The Company shall have the right to deduct from any payment to be made pursuant to the Plan
the amount of any taxes required by law to be withheld therefrom, or to require an Optionee to pay
to the Company such amount required to be withheld prior to the issuance or delivery of any Shares
or the payment of cash under the Plan. The Administrator may, in its discretion, permit an
Optionee to elect to satisfy such withholding obligation by having the Company retain the number of
Shares whose Fair Market Value equals the amount required to be withheld. Any fraction of a Share
required to satisfy such obligation shall be disregarded and the amount due shall instead be paid
in cash by the Optionee.

 

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     8. Exercise of Grant.

          8.1 Procedure for Exercise; Rights as a Shareholder.

               (a) Any Grant granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator under the terms of the Plan and specified in the Option
Agreement provided always that any calculation of any period for vesting as aforesaid shall (i) be
suspended during any period beginning when the Optionee ceases Continuous Service until such
Optionee resumes Continuous Service, (ii) be suspended during the period of suspension referred to
in Section 8.2 below, and (iii) cease upon death of the Optionee and upon the lapse of the Option
for whatsoever reason and in such event of such cessation any vesting which has not taken place
shall automatically cease and lapse, and provided further that the Company shall not be liable in
any way nor shall the Optionee at any time have any rights (whatsoever) against the Company in
relation to such suspension, cessation of and/or lapse of vesting as aforesaid.

               (b) A Grant shall be deemed to be exercised when written notice of such exercise has been
given to the Company, as in a form required under the applicable Option Agreement, in accordance
with the terms of the Grant by the person entitled to exercise the Grant and full payment for the
Shares is made with respect to which the Grant is exercised. Until the issuance (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized transfer agent of the
Company) of the share certificate evidencing such Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to Shares subject to a Grant,
notwithstanding the exercise of an Option or other Grant. The Company shall issue (or cause to be
issued) such share certificate as soon as practicable following the exercise of the Grant. No
adjustment will be made for a dividend or other right for which the record date is prior to the
date the share certificate is issued, except as provided in the Option Agreement or Section 10,
below.

          8.2 Misconduct. If an Optionee is found guilty of serious misconduct or has been convicted of
any criminal offence involving his integrity or honesty, any Option of his then subsisting shall
automatically lapse and become of no further effect on the date such verdict is given by the
relevant court of law, body or authority, and if any investigation is being carried out on the
Optionee in respect of any of the matters referred to above or if his office or duties as an
Employee or Consultant is/are suspended in connection therewith, then his right to exercise the
Option shall automatically be suspended for such period as the Board may in its discretion
determine.

          8.3 Death or Disability of Optionee.

               (a) If an Optionee’s Continuous Service is terminated due to death or Disability more than
three (3) months after such Optionee commenced service for the Company, the portion of the Grant
that would have vested at the 1st anniversary of such Optionee’s Continuous Service
shall automatically vest and be exercisable in accordance with and subject
to paragraph (c) below.

 

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               (b) If an Optionee’s Continuous Service is terminated due to death or Disability any time
following any anniversary of such Optionee’s Continous Service, the portion of the Grant that would
have vested between such anniversary and the subsequent anniversary (and which have not already
vested) of such Optionee’s Continuous Service shall automatically vest and be exercisable in
accordance with and subject to paragraph (c) below.

               (c) If an Optionee’s Continuous Service is terminated due to death or Disability, the Option
or SAR may be exercised at any time within twelve (12) months following the date of death or
termination of employment due to Disability, in the case of death, by the Optionee’s estate or by a
person who acquired the right to exercise the Option or SAR by bequest or inheritance, or, in the
case of Disability, by the Optionee, but in any case (i) only to the extent the Optionee was
entitled to exercise the Option or SAR at the date of his or her termination of Continuous Service
by death or Disability or (ii) to such further extent as set forth in paragraphs (a) and (b) above;
provided, however, that no Option or SAR shall be exercisable after the expiration
of the term set forth in the Option Agreement. To the extent that such Optionee was not entitled
to exercise such Option or SAR at the date of his or her termination of employment by death or
Disability as augmented by the provisions of paragraphs (a) and (b) above or if such Option or SAR
is not exercised (to the extent it could be exercised) within the time specified herein, the Option
or SAR shall terminate.

          8.4 Extension of Time to Exercise. Notwithstanding anything to the contrary in this Section
8, the Administrator may at any time and from time to time prior to the termination of a
Non-Statutory Share Option, with the consent of the Optionee, extend the period of time during
which the Optionee may exercise his or her Non-Statutory Share Option following the date the
Optionee’s ceases Continuous Services; provided, however, that (a) the maximum
period of time during which a Non-Statutory Share Option shall be exercisable following such
termination date shall not exceed an aggregate of six (6) months, (b) the Non-Statutory Share
Option shall not become exercisable after the expiration of the term of such Option as set forth in
the Option Agreement as a result of such extension, and (c) notwithstanding any extension of time
during which the Non-Statutory Share Option may be exercised, such Option, unless otherwise amended
by the Administrator, shall only be exercisable to the extent to which the Optionee was entitled to
exercise it on the date the Optionee ceased Continuous Services. To the extent that such Optionee
was not entitled to exercise the Option at the date of such termination, or if such Optionee does
not exercise an Option which the Optionee was entitled to exercise within the time specified
herein, the Option shall terminate.

          8.5 No compensation. Upon the lapse of an Option for whatsoever reason, under no circumstances
whatsoever shall an Optionee or any person whomsoever be entitled to any compensation for or in
respect of any consequential diminution or extinction of any rights or benefits (actual or
prospective) under and/or in relation to such Option subsisting prior to such lapse or otherwise in
anyway in connection with the Plan or such Option, including without limitation, where such lapse
is by reason of termination of the Optionee’s office or employment by the Company or any Subsidiary
which is a breach of the contract of employment or otherwise, and/or whether the Optionee has
any rights against the Company or any Subsidiary for and/or in
relation to such termination.

 

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     9. Conditions Upon Issuance of Shares.

          9.1 No Violation of Law. Shares shall not be issued pursuant to a Grant or the exercise of a
Grant unless the exercise of such Grant and the issuance and delivery of such Shares pursuant
thereto shall comply with all Applicable Laws, and the Administrator may further subject any
issuance of Shares to the approval of counsel for the Company with respect to such compliance.

          9.2 Execution of Documents. As a condition to the exercise of a Grant, the Administrator may
require the person exercising such Grant to execute an investment representation statement
acceptable to the Company or a share purchase agreement acceptable to the Company, each in forms
approved by the Administrator from time to time, in addition to any other instrument the
Administrator deems necessary or advisable.

     10. Adjustments Upon Changes in Capitalization or Corporate Transaction.

          10.1 Adjustments upon Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Shares covered by each outstanding Grant, and the number
of Shares which have been authorized for issuance under the Plan but as to which no Grants have yet
been granted or which have been returned to the Plan, the exercise or purchase price of each such
outstanding Grant, as well as any other terms that the Administrator determines require adjustment
shall be proportionately adjusted for (a) any increase or decrease in the number of issued Shares
resulting from a share split, reverse share split, share dividend, combination or reclassification
of the Shares, or similar transaction affecting the Shares, (b) any other increase or decrease in
the number of issued Shares effected without receipt of consideration by the Company, or (c) as the
Administrator may determine in its discretion, any other transaction with respect to Shares to
which Section 424(a) of the Code applies or a similar transaction; provided,
however, that conversion of any convertible securities of the Company shall not be deemed
to have been “effected without receipt of consideration.” Such adjustment shall be made by the
Administrator and its determination shall be final, binding and conclusive. Except as the
Administrator determines, no issuance by the Company of shares of any class, or securities
convertible into shares of any class, shall affect, and no adjustment by reason hereof shall be
made with respect to, the number or price of Shares subject to a Grant.

          10.2 Corporate Transaction. In the event of a proposed Corporate Transaction, subject to the
actual consummation of the proposed transaction, each outstanding Grant shall automatically become
fully vested and exercisable, unless the Grant is assumed or substituted with an equivalent option
or right by the successor corporation or the Parent or Subsidiary thereof. If the successor
corporation refuses to assume or substitute for the Grant, the Administrator shall notify the
Optionee that the Grant shall be fully vested and exercisable with respect to all of the Shares
underlying the Grant (including Shares as to which it would not otherwise be vested or exercisable)
for a period of fifteen (15) days from the date of such notice. If the Grant thus becomes fully
vested and exercisable but is not exercised during this fifteen (15) day period, it shall terminate
immediately prior to the effective time of such Corporate Transaction. For the purposes of this
Section 10.2, the Grant shall be considered assumed or
substituted with an equivalent option or right if, in connection with the Corporate Transaction,
the Grant is replaced with a comparable option or right with respect to shares of the successor

 

13

corporation or Parent or Subsidiary thereof or is replaced with a cash incentive program of the
successor corporation or Parent or Subsidiary thereof which preserves the compensation element of
such Grant existing at the time of the Corporate Transaction and provides for subsequent payout in
accordance with the same vesting schedule applicable to such Grant. The determination of Grant
comparability above shall be made by the Administrator and its determination shall be final,
binding and conclusive.

          10.3 Liquidation Event. In the event of a proposed Liquidation Event, the Administrator shall
notify each Optionee of the proposed event at least twenty (20) days prior to the proposed
effective date of the Liquidation Event. The Administrator in its discretion may provide for an
Optionee to have the right to exercise his or her Grant until ten (10) days prior to the proposed
effective date for the Liquidation Event with respect to all Shares underlying the Grant (including
Shares as to which it would not otherwise be vested or exercisable), subject to the actual
completion of the Liquidation Event at the time and in the manner contemplated. In addition, the
Administrator may provide that any Company repurchase option applicable to any Shares issued upon
grant or an exercise of a Grant shall lapse as to all Shares, subject to the actual completion of
the Liquidation Event at the time and in the manner contemplated. Any unexercised Grant shall
terminate immediately prior to effective time of the Liquidation Event.

     11. Effective Date and Term of Plan.

          The Plan, and any amendments to the Plan, shall become effective upon its adoption by the
Board. It shall continue in effect until the end of 2010 unless sooner terminated. Subject to
Applicable Laws, Grants may be granted under the Plan upon its becoming effective.

          Upon the effectiveness of this Plan, no additional grants of Options shall be made under the
Old Plans. Options previously issued and outstanding pursuant to the Old Plans shall continue to
be governed under the rules of the Old Plans.

     12. Amendment, Suspension or Termination of the Plan.

          The Board may at any time amend, suspend or terminate the Plan. No Grant may be granted
during any suspension of the Plan or after termination of the Plan. Any amendment, suspension or
termination of the Plan (including termination of the Plan pursuant to this Section 12) shall not
affect Grants already granted, and such Grants shall remain in full force and effect as if the Plan
had not been amended, suspended or terminated, unless mutually agreed otherwise between the
Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and
the Company.

     13. Availability of Shares; No Issuance in Violation of Law.

          13.1 Availability of Shares. The Company, during the term of the Plan, will at all times keep
available such number of unissued Shares as shall be sufficient to satisfy the requirements of the
Plan.

          13.2 No Issuance in Violation of Law. The inability of the Company to obtain authority from
any regulatory body having jurisdiction under Applicable Law, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any Shares

 

14

hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell such Shares as to
which such requisite authority shall not have been obtained.

     14. No Effect on Terms of Employment/Consulting Relationship.

          The Plan shall not confer upon any Optionee any right with respect to the Optionee’s
Continuous Service, nor shall it interfere in any way with his or her right or the Company’s or a
Related Entity’s right to terminate the Optionee’s Continuous Service at any time, with or without
cause.

     15. No Effect on Retirement and Other Benefit Plans.

          Except as specifically required by law or provided in a retirement or other benefit plan of
the Company or a Related Entity, Grants shall not be deemed compensation for purposes of computing
benefits or contributions under any retirement plan of the Company or a Related Entity, and shall
not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently
instituted under which the availability or amount of benefits is related to level of compensation.
The Plan is not a “Retirement Plan” or “Welfare Plan” under the U.S. Employee Retirement Income
Security Act of 1974, as amended.

     16. Liability of the Company; Consents.

          16.1 Qualification as Incentive Share Option. Neither the Company nor any Related Entity
shall be liable to any Optionee or to any other person if it is determined that an Option intended
to be an Incentive Share Option granted hereunder does not qualify as incentive share options
within the meaning of Section 422 or the Code.

          16.2 Consents. Optionee shall be responsible for obtaining any governmental or other official
consent that may be required by any country or jurisdiction in order to permit the grant or
exercise of any Grant. Neither the Company nor any Related Entity shall be responsible for any
failure by an Optionee to obtain such consent or for any tax or other liability to which an
Optionee may become subject to as a result of his or her participation in the Plan.EX-10.162 SHARE PURCHASE AGREEMENT

 

Exhibit 10.162

EXECUTION COPY

SHARE PURCHASE AGREEMENT

AMONG

FOCUS MEDIA HOLDING LIMITED,

CGEN DIGITAL MEDIA COMPANY LIMITED

THE SELLING SHAREHOLDERS

AND

THE OTHER PARTIES LISTED HEREIN

DATED AS OF

December 8, 2007

 

 

Table of Contents

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE I. DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 
	Section 1.1
	 	Certain Defined Terms	 	 	1	 
	Section 1.2
	 	Other Defined Terms	 	 	10	 
	Section 1.3
	 	Other Interpretive Provisions	 	 	11	 
	 
	 	 	 	 	 	 
	ARTICLE II. PURCHASE AND SALE OF OFFERED SHARES; CANCELLATION OF OPTIONS	 	 	12	 
	 
	 	 	 	 	 	 
	Section 2.1
	 	Purchase and Sale	 	 	12	 
	Section 2.2
	 	Consideration	 	 	12	 
	Section 2.3
	 	First Closing	 	 	16	 
	Section 2.4
	 	Second Closing	 	 	17	 
	Section 2.5
	 	Third Closing	 	 	17	 
	Section 2.6
	 	Rounding	 	 	18	 
	Section 2.7
	 	Share Splits and Other Similar Events	 	 	18	 
	Section 2.8
	 	2008 and 2009 Audited Financial Statements; Disputes	 	 	19	 
	Section 2.9
	 	Sellers’ Representative	 	 	20	 
	 
	 	 	 	 	 	 
	ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES	 	 	20	 
	 
	 	 	 	 	 	 
	Section 3.1
	 	Due Organization, Good Standing and Power	 	 	20	 
	Section 3.2
	 	Capitalization; Valid Issuance	 	 	21	 
	Section 3.3
	 	Group Companies	 	 	21	 
	Section 3.4
	 	Corporate Records	 	 	22	 
	Section 3.5
	 	Financial Statements	 	 	22	 
	Section 3.6
	 	Authorization, Enforceability, No Approvals or Conflicts	 	 	23	 
	Section 3.7
	 	Compliance with Law; Governmental Authorizations	 	 	24	 
	Section 3.8
	 	Licenses	 	 	24	 
	Section 3.9
	 	Litigation	 	 	24	 
	Section 3.10
	 	Absence of Certain Changes	 	 	24	 
	Section 3.11
	 	Tax Matters	 	 	26	 
	Section 3.12
	 	Dividends and Distributions	 	 	26	 
	Section 3.13
	 	Officers, Employees and Labor	 	 	27	 
	Section 3.14
	 	Loans	 	 	28	 
	Section 3.15
	 	Share Option and Other Plans	 	 	28	 
	Section 3.16
	 	Intellectual Property	 	 	29	 
	Section 3.17
	 	Contracts	 	 	29	 
	Section 3.18
	 	Certain Transactions	 	 	30	 
	Section 3.19
	 	Structure Agreements	 	 	31	 
	Section 3.20
	 	Compliance with Laws	 	 	31	 
	Section 3.21
	 	Environmental Matters	 	 	32	 
	Section 3.22
	 	Insurance	 	 	32	 
	Section 3.23
	 	Personal Property Assets	 	 	33	 
	Section 3.24
	 	Real Property	 	 	33	 
	Section 3.25
	 	No State Assets	 	 	33	 

i

 

	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 
	Section 3.26
	 	Brokers	 	33
	Section 3.27
	 	No Other Representations and Warranties	 	33
	 
	 	 	 	 
	ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS	 	34
	 
	 	 	 	 
	Section 4.1
	 	Authorization, Enforceability	 	34
	Section 4.2
	 	Ownership and Transfer of Offered Shares	 	34
	Section 4.3
	 	No Approvals or Conflicts	 	34
	Section 4.4
	 	No Competition	 	35
	Section 4.5
	 	Brokerage	 	35
	Section 4.6
	 	Investment	 	35
	Section 4.7
	 	Accredited Investor; Foreign Investor	 	35
	Section 4.8
	 	No Other Representations and Warranties	 	35
	 
	 	 	 	 
	ARTICLE V. REPRESENTATIONS AND WARRANTIES OF BUYER	 	36
	 
	 	 	 	 
	Section 5.1
	 	Organization	 	36
	Section 5.2
	 	Authorization, Enforceability	 	36
	Section 5.3
	 	No Approvals or Conflicts	 	36
	Section 5.4
	 	Litigation	 	37
	Section 5.5
	 	Outstanding Share Capital	 	37
	Section 5.6
	 	Validity of Share Consideration	 	37
	Section 5.7
	 	SEC Filings	 	37
	Section 5.8
	 	Absence of Certain Changes	 	38
	Section 5.9
	 	No Consent for Creation of Registration Rights	 	38
	Section 5.10
	 	No Other Representations or Warranties	 	38
	 
	 	 	 	 
	ARTICLE VI. COVENANTS AND AGREEMENTS	 	38
	 
	 	 	 	 
	Section 6.1
	 	Conduct of Business Prior to the First Closing	 	38
	Section 6.2
	 	Filings and Consents	 	40
	Section 6.3
	 	Third Party Consents	 	40
	Section 6.4
	 	Tax Matters; Cooperation; Preparation of Returns; Tax Elections	 	40
	Section 6.5
	 	Employees; Benefit Plans	 	41
	Section 6.6
	 	Related Party Accounts	 	41
	Section 6.7
	 	Non-Violation	 	41
	Section 6.8
	 	Confidentiality	 	42
	Section 6.9
	 	Buyer's Board of Directors	 	42
	Section 6.10
	 	Buyer's Deposit; Bank Guarantee Letter	 	42
	Section 6.11
	 	No Transfer by Selling Shareholders	 	43
	Section 6.12
	 	Change of Owners; CGEN Network Transfer	 	43
	Section 6.13
	 	Key Management Independence	 	43
	Section 6.14
	 	Non-competition	 	44
	Section 6.15
	 	Further Actions	 	44
	Section 6.16
	 	Delivery of Allocation Schedule	 	45
	Section 6.17
	 	Grant of Buyer Options	 	45
	Section 6.18
	 	Delivery of Audited September 30, 2007 Financial
	 	 
	 
	 	Statements; 2007 Audited Financial Statements, Closing	 	 
	 
	 	Net Current Assets	 	45

ii

 

	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 
	Section 6.19
	 	Payment of Permitted Dividends; Other Distributions	 	45	 
	Section 6.20
	 	Cancellation of Company Stock Options	 	46	 
	Section 6.21
	 	Medley Repayment	 	46	 
	Section 6.22
	 	Use of CGEN’s Media-1 Software	 	46	 
	 
	 	 	 	 	 
	ARTICLE VII. CONDITIONS TO THE OBLIGATIONS OF THE SELLER PARTIES and THE OTHER SELLING
SHAREHOLDERS	 	46	 
	 
	 	 	 	 	 
	Section 7.1
	 	Representations and Warranties	 	46	 
	Section 7.2
	 	Performance	 	46	 
	Section 7.3
	 	Qualifications	 	46	 
	Section 7.4
	 	No Material Adverse Change	 	47	 
	Section 7.5
	 	Registration Rights Agreement	 	47	 
	Section 7.6
	 	Officer's Certificate	 	47	 
	Section 7.7
	 	Injunctions	 	47	 
	Section 7.8
	 	Adverse Market Change	 	47	 
	Section 7.9
	 	Opinion of Counsel	 	47	 
	Section 7.10
	 	Employment Agreements	 	47	 
	 
	 	 	 	 	 
	ARTICLE VIII. CONDITIONS TO BUYER’S OBLIGATIONS	 	47	 
	 
	 	 	 	 	 
	Section 8.1
	 	Representations and Warranties	 	47	 
	Section 8.2
	 	Closing Net Current Assets	 	48	 
	Section 8.3
	 	Performance	 	48	 
	Section 8.4
	 	No Indebtedness	 	48	 
	Section 8.5
	 	Officer's Certificate	 	48	 
	Section 8.6
	 	Outstanding Obligations	 	48	 
	Section 8.7
	 	Employment Agreements	 	49	 
	Section 8.8
	 	Corporate Matters	 	49	 
	Section 8.9
	 	Opinions of Counsel	 	49	 
	Section 8.10
	 	CGEN Network Transfer	 	49	 
	Section 8.11
	 	Injunctions	 	49	 
	Section 8.12
	 	Financial Statements	 	49	 
	Section 8.13
	 	Medley Payoff Statement	 	49	 
	 
	 	 	 	 	 
	ARTICLE IX. TERMINATION	 	49	 
	 
	 	 	 	 	 
	Section 9.1
	 	Termination	 	49	 
	Section 9.2
	 	Procedure and Effect of Termination	 	50	 
	 
	 	 	 	 	 
	ARTICLE X. INDEMNIFICATION	 	51	 
	 
	 	 	 	 	 
	Section 10.1
	 	Indemnification by the Management Parties	 	51	 
	Section 10.2
	 	Indemnification by the Selling Shareholders	 	52	 
	Section 10.3
	 	Indemnification by Buyer	 	52	 
	Section 10.4
	 	Indemnification as Exclusive Remedy; Mitigation	 	53	 
	Section 10.5
	 	Limitation on Indemnification	 	53	 
	Section 10.6
	 	Indemnification Calculations	 	53	 
	Section 10.7
	 	Notice and Opportunity to Defend	 	53	 
	Section 10.8
	 	Payment in Kind	 	54	 

iii

 

	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 
	ARTICLE XI. MISCELLANEOUS	 	54	 
	 
	 	 	 	 	 
	Section 11.1
	 	Fees and Expenses; Liquidated Damages	 	54	 
	Section 11.2
	 	Governing Law	 	55	 
	Section 11.3
	 	Amendment	 	55	 
	Section 11.4
	 	No Assignment	 	55	 
	Section 11.5
	 	Waiver	 	56	 
	Section 11.6
	 	Notices	 	56	 
	Section 11.7
	 	Complete Agreement	 	57	 
	Section 11.8
	 	Counterparts	 	57	 
	Section 11.9
	 	Publicity	 	57	 
	Section 11.10
	 	Headings	 	57	 
	Section 11.11
	 	Severability	 	58	 
	Section 11.12
	 	Third Parties	 	58	 
	Section 11.13
	 	Dispute Resolution	 	58	 
	Section 11.14
	 	Obligations of Selling Shareholders	 	58	 

SCHEDULES

	 	 	 
	1.1A

	 	Ancillary Documents
	1.1B

	 	Knowledge of Buyer
	1.1C

	 	Knowledge of Seller Parties
	6.13(e)

	 	Accounting Policies
	7.3

	 	Qualifications of Buyer
	8.3(c)

	 	Qualifications of Seller Parties

Disclosure Schedule

EXHIBITS

	 	 	 
	A

	 	Unaudited Financial Statements
	B

	 	Form of Registration Rights Agreement
	C

	 	Form of Legal Opinion of Cayman Islands Counsel to Buyer
	D

	 	Form of Key Company Employee Employment Agreement
	E

	 	Form of Legal Opinion of Cayman Islands Counsel to Group Companies and Selling
Shareholders
	F

	 	Form of Legal Opinion of PRC Counsel to Group Companies and Selling
Shareholders
	G

	 	Form of Medley Payoff Statement
	H

	 	Form of Notice to Option Holders Re: Cancellation of Company Stock Options
	I

	 	Form of Loan Repayment Loan Agreement

iv

 

SHARE PURCHASE AGREEMENT

     This SHARE PURCHASE AGREEMENT (this “Agreement”), dated as of December 8, 2007, among CGEN
DIGITAL MEDIA COMPANY LIMITED, a company with limited liability organized under the laws of the
Cayman Islands (“CGEN” or the “Company”), the Other Management Parties (as defined below), the
Management Shareholder (as defined below, and together with the Other Management Parties and the
Company, the “Seller Parties”), the other selling shareholders of the Company set forth on the
signature pages hereto and Medley Opportunity Fund Ltd. (the “Other Selling Shareholders”, and
together with the Management Shareholder, the “Selling Shareholders”) and FOCUS MEDIA HOLDING
LIMITED, a company with limited liability organized under the laws of the Cayman Islands (“Focus
Media” or “Buyer”).

     WHEREAS, the Selling Shareholders collectively own all of the outstanding Shares (as defined
below), including shares issuable upon conversion of Company Preferred Shares and upon exercise of
warrants, but excluding shares issuable under stock options of the Company issued to its employees
pursuant to the Option Plans (as defined below) (the “Offered Shares”);

     WHEREAS, the Selling Shareholders have duly approved the sale of the Offered Shares to Buyer;

     WHEREAS, the Selling Shareholders desire to sell to Buyer, and Buyer desires to purchase from
the Selling Shareholders, the Offered Shares, on a fully converted and diluted basis, upon the
terms and subject to the conditions set forth in this Agreement;

     WHEREAS, at least 15 days prior to the First Closing Date the Company intends to send each
Option Holder (as defined herein) written notice advising such Option Holder that,
contemporaneously with the effectiveness of the First Closing (i) each in-the-money stock option
held by such Option Holder will be cancelled in exchange for the consideration provided by Buyer
(on behalf of the Company) as set forth in Article II of this Agreement and (ii) each
out-of-the-money stock option held by such Option Holder will be cancelled;

     NOW, THEREFORE, in consideration of the premises and the mutual promises herein made and the
representations, warranties, covenants and agreements contained herein and intending to be legally
bound hereby, the parties hereto hereby agree as follows:

ARTICLE I.

DEFINITIONS

     Section 1.1 Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:

     “2007 Audited Financial Statements” means the audited financial statements of the Company and
its consolidated entities for the twelve-month period starting from January 1, 2007 and ending
December 31, 2007, prepared by Ernst & Young or another Big Four Accounting Firm, in accordance
with U.S. GAAP.

     “2008 Audited Annual Net Income” means the Company’s audited consolidated net income after tax
as defined under U.S. GAAP for the twelve-month period starting from the

 

 

first day of the first full month immediately following the First Closing Date and ending twelve
months thereafter as set forth in the 2008 Audited Financial Statements, plus the sum of any amount
of actual accounting benefit which is accepted by the Buyer (such acceptance not to be unreasonably
withheld) and equal to 50% of the aggregate rent reductions enjoyed by Buyer during such period
from retailers for its own in-store television network (excluding the Company’s network) arising
out of or resulting from rent reductions that the Company achieves for Buyer’s network following
the date of this Agreement.

     “2008 Audited Financial Statements” means the audited financial statements of the Company and
its consolidated entities for the twelve-month period starting from the first day of the first full
month immediately following the First Closing Date and ending twelve months thereafter, prepared by
the Auditors in accordance with U.S. GAAP.

     “2009 Audited Annual Net Income” means the Company’s audited consolidated net income after tax
as defined under U.S. GAAP for the twelve-month period starting from the first day immediately
following the end of the period for which the 2008 Audited Financial Statements are prepared and
ending twelve months thereafter as set forth in the 2009 Audited Financial Statements, plus the sum
of any amount of actual accounting benefit which is accepted by the Buyer (such acceptance not to
be unreasonably withheld) and equal to 50% of the aggregate rent reductions enjoyed by Buyer during
such period from retailers for its own in-store television network (excluding the Company’s
network) arising out of or resulting from rent reductions that the Company achieves for Buyer’s
network following the date of this Agreement.

     “2009 Audited Financial Statements” means the audited financial statements of the Company and
its consolidated entities for the twelve-month period starting from the first day immediately
following the end of the period for which the 2008 Audited Financial Statements are prepared,
prepared by the Auditors in accordance with U.S. GAAP.

     “Adjusted Purchase Price” means, if the 2008 Audited Annual Net Income is equal to or greater
than US$17,500,000, US$350,000,000.

     “ADSs” means the American depositary shares of Buyer, each representing five (5) FM Ordinary
Shares, quoted for trading on the Nasdaq Global Market.

     “Affiliate” means, with respect to any specified Person, any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is under common
control with, such specified Person.

     “Aggregate Consideration” means, to the extent applicable, the Initial Cash Consideration, the
Second Installment Consideration, the Third Installment Consideration and the Base Catchup Amount
or the Adjusted Catchup Amount, as applicable.

     “Agreement” means this Share Purchase Agreement among the parties hereto, as amended, modified
or supplemented from time to time.

     “Ancillary Documents” means those agreements, documents and instruments as set forth in
Schedule 1.1A.

     “Audited September 30, 2007 Financial Statements” means the audited financial statements of
the Company and its consolidated entities for the nine-month period ending

2

 

September 30, 2007, prepared by Ernst & Young or another Big Four Accounting Firm in
accordance with U.S. GAAP.

     “Auditors” means Deloitte Touche Tohmatsu, the independent auditors to Buyer, or another Big
Four Accounting Firm.

     “Average FM Share Price” means, with respect to the Second Installment Share Consideration,
the Third Installment Share Consideration, the Base Catchup Amount and the Adjusted Catchup Amount,
as the case may be, one-fifth of the average closing price for ADSs for the 14 trading days
preceding the date of execution of this Agreement, as adjusted for any stock split, stock
consolidation or like event.

     “Bank Guarantee Letter” means that certain bank guarantee letter from Morgan Stanley, Hong
Kong to Buyer, dated as of the date hereof, stipulating that Buyer maintains an investment account
with Morgan Stanley, Hong Kong and providing the value of such account as of the date hereof. The
parties agree that at least US$148,437,500 of such value shall be maintained in such account and
shall be used solely in connection with the payment of the Initial Cash Consideration at the First
Closing or for any other payment due from Buyer pursuant to this Agreement, and for no other
purpose without the prior written consent of the Company and the Sellers’ Representative, until the
earlier of (i) the First Closing (and the parties agree and understand that the funds may be used
to pay the Initial Cash Consideration), (ii) the termination of the Agreement and (iii) January 31,
2008.

     “Base Purchase Price” means US$306,250,000.

     “Big Four Accounting Firm” means Ernst & Young, KPMG, Pricewaterhouse Coopers or Deloitte
Touche Tohmatsu.

     “Business” means (i) providing advertising on digital flat-panel displays networked through
broad-band technology in hypermarkets, home improvement stores and other retail venues, (ii)
providing promotional services for retailers and advertisers, and (iii) any other business as
currently conducted by the Group Companies.

     “Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are
required or authorized by law to be closed in Shanghai, PRC; Hong Kong Special Administrative
Region; or The City of New York.

     “Cause” means:

	 	(i)	 	a Key Company Employee’s willful misconduct in the performance of his or her
material duties to the Group Companies;
	 
	 	(ii)	 	a Key Company Employee’s misappropriation of material assets of, or
embezzlement from, the Group Companies;
	 
	 	(iii)	 	willful breach by a Key Company Employee of such employee’s material
obligations under the relevant Key Company Employee Employment Agreement;
	 
	 	(iv)	 	a material breach by a Key Company Employee of the terms and conditions of such
employee’s Key Company Employee Employment Agreement which

3

 

	 	 	 	breach is not cured within a reasonable period following delivery of written notice
thereof to such employee, which written notice specifically identifies the manner in
which such Key Company Employee is in breach of the terms and conditions of such Key
Company Employee Employment Agreement; and
	 
	 	(v)	 	fraud, material malfeasance or willful violation of provisions of Buyer’s code
of ethics relating to fraud or the integrity of the Key Company Employee.

     No act or failure to act on the part of a Key Company Employee shall be considered “willful”
unless it is done, or omitted to be done, by the Key Company Employee in bad faith or without
reasonable belief that the Key Company Employee’s act or omission was in the best interests of the
Company. Any act, or failure to act, based upon express authority given pursuant to a resolution
duly adopted by the board of directors of the Company or Buyer with respect to such act or omission
or based upon the advice of counsel for the Company or Buyer shall be presumed to be done, or
omitted to be done, by a Key Company Employee in good faith and in the best interests of the
Company.

     “CGEN Network” means Shanghai CGEN Digital Media Network Co., Ltd., a company organized and
existing under the laws of the PRC.

     “CGEN Network Transfer” means the transfer by the shareholders of CGEN Network of all of the
equity interest in CGEN Network to Buyer or a Person or Persons designated by Buyer, subject to
Section 6.12.

     “Change in Control” means (w) an event where all or substantially all of the assets of Buyer
are sold, (x) a merger, consolidation, amalgamation, share exchange or similar business combination
involving Buyer (A) pursuant to which the outstanding FM Ordinary Shares would be converted into
cash or securities of another Person or (B) which would result in a third party or Group
beneficially owning, directly or indirectly, 100% of the total voting power of all FM Ordinary
Shares then outstanding and normally entitled to vote in the election of directors without regard
to the occurrence of any contingency, (y) any other acquisition (including by way of merger,
consolidation, share exchange, trade sale or otherwise) by any Person or Group of beneficial
ownership, directly or indirectly, of 100% of the total voting power of all FM Ordinary Shares then
outstanding and normally entitled to vote in the election of directors without regard to the
occurrence of any contingency or (z) an event where any Person or Persons other than Buyer or its
Affiliates is or becomes the beneficial owner, directly or indirectly, of more than 50% of the
total voting power of all FM Ordinary Shares then outstanding and normally entitled to vote in the
election of directors without regard to the occurrence of any contingency and (A) the Chief
Executive Officer and the Chief Financial Officer of Buyer immediately prior to such event are not
retained as the Chief Executive Officer and the Chief Financial Officer of Buyer, for a term ending
on or after the Third Closing Date, immediately following such event. For the purposes of this
definition, a Person shall be deemed to beneficially own any voting securities of an entity held by
any other entity (the “Parent Entity”), if such Person is the beneficial owner, directly or
indirectly, of more than 50% of the voting power of the voting securities of the Parent Entity.

     “Closing Net Current Assets” means the Company’s Net Current Assets as of the First Closing
Date, which shall include any dividends declared by the Company on or prior to the First Closing
Date but not paid on or prior to such date.

4

 

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Company Options” means options to purchase Company Ordinary Shares granted under an Option
Plan.

     “Company Ordinary Shares” means the ordinary shares, US$0.000001 par value per share, of the
Company.

     “Company Preferred Shares” means the Series A, Series B and Series C redeemable convertible
preferred shares, each with a par value of US$0.000001 per share, of the Company.

     “Competing Business” means any business providing in-store advertising through the use of
flat-panel displays in hypermarkets, supermarkets, home improvement stores and other retail or
entertainment venues.

     “Confidentiality Agreement” means the Non-disclosure Agreement entered into by each of the
Company and Buyer in favor of the other party, dated October 26, 2007.

     “Contract” means any contract, agreement, arrangement or understanding, whether written or
oral, including without limitation, the Structure Agreements.

     “Control” (including the terms “controlled by” and “under common control with”), with respect
to the relationship between or among two or more Persons, means the possession, directly or
indirectly, of the power to direct or cause the direction of the affairs or management of a Person,
whether through the ownership of voting securities, by Contract or otherwise, including the
ownership, directly or indirectly, of securities having the power to elect a majority of the board
of directors or similar body governing the affairs of such Person.

     “Deposit” means US$20,000,000 in immediately available funds deposited by Buyer, on the date
of the execution of this Agreement, or if such date is not a Business Day, on the first Business
Day following the date of the execution of this Agreement, in an account specified by the Company.
For the avoidance of doubt, any references to current assets of the Company in this Agreement and
the Ancillary Documents shall exclude the amount of the Deposit.

     “Disclosure Schedule” means the Disclosure Schedule attached hereto, dated as of the date
hereof, delivered by the Company to Buyer in connection with this Agreement. Notwithstanding
anything to the contrary contained in the Disclosure Schedule or in this Agreement, the information
and disclosures contained in any section of the Disclosure Schedule shall be deemed to be disclosed
and incorporated by reference in any other section of the Disclosure Schedule as though fully set
forth in such other section for which the applicability of such information and disclosure is
reasonably apparent on the face of such information or disclosure.

     “Encumbrance” means any security interest, pledge, mortgage, lien, charge, limitation,
condition, equitable interest, option, easement, encroachment, right of first refusal, or similar
adverse claim or restriction, including any restriction on transfer or other assignment, as
security or otherwise, of or relating to use, quiet enjoyment, voting, receipt of income or
exercise of any other attribute of ownership.

5

 

     “Environmental Claim” means any written notice, claim or demand or any action, suit,
complaint, or proceeding by any person alleging liability or potential liability (including
liability or potential liability for investigatory costs, cleanup costs, governmental response
costs, natural resource damages, fines or penalties) under any Environmental Laws.

     “Environmental Laws” means all Laws in effect in the PRC at the date of this Agreement
relating to protection of the environment.

     “Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

     “Financing Lease” means (i) any lease of property, real or personal, the obligations under
which are capitalized on the balance sheet of the Company and (ii) any other such lease to the
extent that the then present value of the minimum rental commitment thereunder should, in
accordance with U.S. GAAP, be capitalized on a balance sheet of the Company.

     “First Closing Allocation Schedule” means a schedule setting forth the allocation of the
Initial Cash Consideration to be signed and delivered by the Sellers’ Representative (on behalf of
the Option Holders) and all of the Selling Shareholders no later than five Business Days prior to
the First Closing Date.

     “FM Ordinary Shares” means the ordinary shares, US$0.00005 par value per share, of Buyer.

     “Government Official” means any official, director, politician, employee or other similar
Persons with a position at a Governmental Authority.

     “Governmental Authority” means any government or governmental or regulatory body thereof, or
political subdivision thereof, whether federal, state, municipal, local or foreign, or any agency,
instrumentality or authority thereof, or any court or arbitrator (public or private).

     “Governmental Authorization” means any consent or approval of or from any United States of
America, PRC or Cayman Islands Governmental Authority.

     “Governmental Order” means any order, writ, injunction, decree, stipulation, determination or
award entered by or with any Governmental Authority.

     “Group” has the meaning set forth in the Exchange Act.

     “Group Companies” means the Company, the Subsidiaries, any variable interest entity controlled
by and consolidated with the Company and any Person that is not a natural person and that is
controlled by a Group Company, a list of which companies is set forth in Section 3.3 of the
Disclosure Schedule.

     “Hazardous Materials” means all materials defined as “hazardous substances” or “hazardous
wastes,” toxic, pollutant, contaminant or words of similar meaning or effect, or any other term of
similar import under any Environmental Law.

     “Indebtedness” of a Person, at a particular date, means the sum (without duplication) at such
date of (i) indebtedness for borrowed money or for the deferred purchase price of property or
services in respect of which such Person is liable as obligor, (ii) indebtedness

6

 

secured by any lien on any property or asset owned or held by such Person regardless of
whether the indebtedness secured thereby shall have been assumed by or is a primary liability of
such Person, (iii) obligations of such Person under Financing Leases, (iv) the face amount of all
letters of credit issued for the account of such person and, without duplication, the unreimbursed
amount of all drafts drawn thereunder and (v) obligations (in the nature of principal or interest)
of such Person in respect of acceptances or similar obligations issued or created for the account
of such Person. For the avoidance of doubt, obligations of a Group Company pursuant to a Contract
entered into between such Group Company and a customer in the ordinary course of business shall not
constitute Indebtedness.

     “Intellectual Property” means all rights under patent, copyright, trademark or trade secret
Law or any other statutory provision or common law doctrine, including design rights.

     “Key Company Employees” means Mr. Yising Chan, Mr. Guanyong Tian and Mr. Mei Lijun.

     “Key Management Dismissal Event” means the dismissal of any of the Key Company Employees by
Buyer, directly or indirectly, without Cause, other than pursuant to Section 2.2(b)(ii).

     “Key Company Employee Employment Agreement” means an employment agreement substantially in the
form attached hereto as Exhibit D.

     “Knowledge of Buyer” means the actual knowledge after due inquiry of the individuals set forth
on Schedule 1.1B hereto.

     “Knowledge of Seller Parties” means the actual knowledge after due inquiry of the individuals
set forth on Schedule 1.1C hereto.

     “Law” means any statute, code, law, ordinance, regulation or rule or other legally binding
requirement of any Governmental Authority.

     “Management Parties” means the Management Shareholder and the Other Management Parties.

     “Management Shareholder” means Mr. Yising Chan.

     “Material Adverse Effect” or “Material Adverse Change” means any effect or change that would
be or would reasonably be expected to be materially adverse (i) to the business, assets, condition
(financial or otherwise), operating results or operations of such entity and its subsidiaries,
taken as a whole, except: (a) effects or changes (including general economic and political
conditions) that do not have a materially disproportionate effect (relative to other industry
participants) on such entity and generally affect the industry in which such entity operates; (b)
effects or changes relating to loss of employees, suppliers, vendors, agents, customers or other
business partners (including web sites and portals) resulting primarily from the announcement or
pendency of the transactions contemplated by this Agreement; (c) effects or changes to the extent
attributable to changes in PRC Law after the date of this Agreement and (d) any change or effect
that results from any action taken at the request of Buyer or as required by the terms of this
Agreement or the Ancillary Documents by the Company or the Selling Shareholders (including, without
limitation, any change after the date hereof in the Company’s accounting methods with respect to
doubtful

7

 

accounts, to the extent such change is made in order to treat such accounts in a manner
consistent with treatment by Buyer) or (ii) to the ability of Buyer or the Selling Shareholders, as
applicable, to perform its or their obligations hereunder. Notwithstanding the foregoing,
termination by the Company or amendment by the Company in a manner adverse and material to the
Company or termination by the Carrefour Commercial Companies (provided that such termination is a
result of material breach by the Company of the terms of the Carrefour Contract) of the Carrefour
Contract shall constitute a Material Adverse Effect on the Company.

     “Medley” means Medley Opportunity Fund Ltd. (Cayman).

     “Medley Credit Agreement” means the credit agreement dated as of September 7, 2007 among
Medley, the Company and CGEN Media Technology Company Limited (Hong Kong) (as amended).

     “Medley Warrants” means the warrants to purchase Company Ordinary Shares in an amount equal to
3% of the outstanding Company Ordinary Shares on a fully-diluted and as converted basis (excluding
the Company Ordinary Shares for which such warrants are exercisable) pursuant to the warrant
purchase agreement dated as of September 11, 2007 between the Company and Medley.

     “MOFCOM” means the Ministry of Commerce or, with respect to any matter to be submitted for
examination and approval by the Ministry of Commerce, any government entity which is similarly
competent to examine and approve such matter under the laws of the PRC.

     “Net Current Assets” means consolidated current assets minus consolidated current liabilities
(in the case of the Company, current liabilities shall be reduced by the amount of any incremental
provisioning for doubtful accounts which may arise between the date hereof and the First Closing
Date as a result of a change in the Company’s accounting methods with respect thereto, if such
change is made to treat such accounts in a manner consistent with treatment by Buyer). For the
avoidance of doubt current assets of the Company shall include any amounts received by the Company
in connection with the exercise of the Medley Warrants or the exercise or conversion of any other
securities of the Company.

     “Option Holder” means a holder as of the First Closing Date of Company Options pursuant to an
Option Plan.

     “Option Holders’ Representative” means Sellers’ Representative who shall receive all payments
and distributions paid by Buyer (on behalf of the Company) with respect to Company Options and
shall distribute such amounts to the Option Holders.

     “Option Plans” means the employee stock option plans and other equity incentive plans
maintained by the Company as of the date hereof.

     “Other Management Parties” means Mr. Guanyong Tian and Mr. Mei Lijun.

     “Permitted Dividends” means dividends declared prior to the First Closing Date, the amount of
which shall be based on Company management’s best estimate of the amount by which the Company’s Net
Current Assets, as reflected on the 2007 Audited Financial Statements shall be greater than zero.
Permitted Dividends shall be paid, in accordance with

8

 

applicable law, prior to the First Closing Date, provided, that to the extent the Company’s
Net Current Assets (as reflected on the 2007 Audited Financial Statements) minus any Permitted
Dividends paid prior to the First Closing Date, is greater than zero, such excess amount may be
paid, in accordance with applicable law, in the form of additional Permitted Dividends prior to
June 30, 2008.

     “Permitted Encumbrances” means (i) Encumbrances for Taxes not yet due and payable or being
contested in good faith, (ii) Encumbrances in respect of property or assets imposed by Law that
were incurred in the ordinary course of business, such as carriers’, warehousemen’s, materialmen’s
and mechanics’ liens and other similar liens, (iii) pledges or deposits made in the ordinary course
of business to secure obligations under workers’ compensation laws or similar legislation or to
secure public or statutory obligations, (iv) survey exceptions, reciprocal easement agreements and
other customary encumbrances on title to real property, (v) Encumbrances specified in Section 1.1
to the Disclosure Schedule and (vi) such other encumbrances as would not, individually or in the
aggregate, materially and adversely affect the value of or the use of the encumbered property for
its current and anticipated purposes.

     “Person” means any individual, partnership, firm, company, corporation, association, trust,
unincorporated organization, joint venture or other entity.

     “PRC” means the People’s Republic of China, but solely for the purposes of this Agreement
excluding the Hong Kong Special Administrative Region, Macau Special Administrative Region and the
island of Taiwan.

     “Prospective Event of Change in Control” means any potential event, including any transaction
of which Buyer is aware, which is reasonably likely to result in a Change in Control in thirty (30)
days or less.

     “Related Party” means, in respect of any Person, any other Person specified in Item 7.B of
Form 20-F under the Securities Act.

     “RMB” means Renminbi, the legal currency of the PRC.

     “Second Installment Allocation Schedule” means a schedule setting forth the allocation of the
Second Installment Share Consideration to be signed and delivered by the Sellers’ Representative
(on behalf of the Option Holders) and all of the Selling Shareholders no later than five (5)
Business Days prior to the Second Closing Date.

     “Securities Act” means the United States Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

     “Shares” means all of the equity interests of the Company, including Company Ordinary Shares,
Company Preferred Shares, options, warrants and other equity interests.

     “Structure Agreements” means, collectively, the Contracts and instruments, a list of which is
attached hereto as Section 3.19 of the Disclosure Schedule, which were entered into to enable the
Company to effectively control and consolidate the financial results of CGEN Network (and its
subsidiaries) with its financial statements.

     “Subsidiaries” means any and all corporations, partnerships, companies and other entities with
respect to which the Company, directly or indirectly, owns more than 50% of the

9

 

securities having the power to elect members of the board of directors or similar body
governing the affairs of such entity.

     “subsidiaries” means, with respect to any Person, any other Person with respect to which the
first Person, directly or indirectly, owns 50% or more of the securities of the second Person
having the power to elect members of the board of directors or similar body governing the affairs
of such entity.

     “Tax” or “Taxes” means any taxes of any kind, including but not limited to those on or
measured by or referred to as income, gross receipts, capital, sales, use, ad valorem, franchise,
profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium,
value-added, property or windfall profits taxes, customs, duties or similar fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties, additions to tax or
additional amounts imposed by any Governmental Authority.

     “Tax Return” means any return, estimate, report or statement required to be filed with any
Governmental Authority with respect to Taxes, including any schedule or attachment thereto,
amendment thereof, claim for refund or declaration of estimated Tax.

     “Taxing Authority” means, with respect to any Tax, the government entity or political
subdivision thereof that imposes such Tax and the agency (if any) charged with the collection of
such Tax for such entity or subdivision.

     “Third Installment Allocation Schedule” means a schedule setting forth the allocation of the
Third Installment Consideration and the Base Catchup Amount or the Adjusted Catchup Amount, as
applicable, to be signed and delivered by the Sellers’ Representative (on behalf of the Option
Holders) and all of the Selling Shareholders no later than five (5) Business Days prior to the
Third Closing Date.

     “Unearned Second Installment Consideration” means US$90,781,250 minus the Second Installment
Consideration.

     “U.S. GAAP” means United States generally accepted accounting principles and practices as in
effect from time to time.

     Section 1.2 Other Defined Terms. The following terms shall have the meanings defined
for such terms in the Sections set forth below:

	 	 	 
	Term	 	Section
	Additional Share Consideration

	 	Section 2.2(c)(i)
	Adjusted Catchup Amount

	 	Section 2.2(c)(i)
	Agreement

	 	Preamble
	Audited Financial Statements

	 	Section 3.5(a)
	Balance Sheet

	 	Section 3.5(a)
	Balance Sheet Date

	 	Section 3.5(a)
	Base Catchup Amount

	 	Section 2.2(c)(i)
	Buyer

	 	Preamble
	Buyer Indemnified Persons

	 	Section 10.1(a)
	Buyer’s Liquidated Damages

	 	Section 11.1(d)
	Buyer Options

	 	Section 6.17
	Buyer SEC Documents

	 	Section 5.7(a)

10

 

	 	 	 
	Term	 	Section
	Carrefour Contract

	 	Section 2.2(b)(ii)
	CGEN

	 	Preamble
	Company

	 	Preamble
	Confidential Information

	 	Section 6.8
	Deposit Account

	 	Section 6.10
	Financial Statements

	 	Section 3.5(a)
	First Closing

	 	Section 2.3(a)
	First Closing Date

	 	Section 2.3(a)
	Focus Media

	 	Preamble
	HKIAC

	 	Section 11.13(b)
	Indemnifying Management Party

	 	Section 10.1(a)
	Indemnifying Selling Shareholder

	 	Section 10.2(a)
	Indemnifying Party

	 	Section 10.7
	Independent Accounting Firm

	 	Section 2.8(a)
	Initial Cash Consideration

	 	Section 2.2(a)
	IP Licenses

	 	Section 3.16(c)
	Key Company Employee Employment Agreements

	 	Section 7.10
	Loan Repayment Loan

	 	Section 6.21
	Long-Stop Date

	 	Section 9.1(e)
	Losses

	 	Section 10.1(a)
	Material Contract

	 	Section 3.17(a)
	Medley Payoff Statement

	 	Section 6.21
	Offered Shares

	 	Preamble
	Other Selling Shareholders

	 	Preamble
	Registration Rights Agreement

	 	Section 7.5
	Related Party Accounts

	 	Section 6.6
	Reviewed Financial Statements

	 	Section 3.5(a)
	SEC

	 	Section 5.7(a)
	Second Closing

	 	Section 2.4(a)
	Second Closing Date

	 	Section 2.4(a)
	Second Installment Cash Consideration

	 	Section 2.2(b)(iii)
	Second Installment Consideration

	 	Section 2.2(b)
	Second Installment Share Consideration

	 	Section 2.2(b)(iii)
	Seller Indemnified Persons

	 	Section 10.3(a)
	Seller Parties

	 	Preamble
	Sellers’ Liquidated Damages

	 	Section 11.1(c)
	Sellers’ Representative

	 	Section 2.9
	Selling Shareholders

	 	Preamble
	Third Closing

	 	Section 2.5(a)
	Third Closing Date

	 	Section 2.5(a)
	Third Installment Cash Consideration

	 	Section 2.2(c)(iii)
	Third Installment Consideration

	 	Section 2.2(c)
	Third Installment Share Consideration

	 	Section 2.2(c)(iii)
	Unaudited Financial Statements

	 	Section 3.5(a)

     Section 1.3 Other Interpretive Provisions The words “hereof,” “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references
are to this Agreement unless otherwise specified. The words

11

 

“include,” “includes” and “including” shall be deemed to be followed by the phrase “without
limitation.” The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

ARTICLE II.

PURCHASE AND SALE OF OFFERED SHARES; CANCELLATION OF OPTIONS

     Section 2.1 Purchase and Sale.

          (a) Subject to the terms and conditions set forth in this Agreement, (x) each Selling
Shareholder shall sell to Buyer all of such Selling Shareholder’s right, title and interest in the
Offered Shares owned by it, free and clear of all Encumbrances at the First Closing Date, and Buyer
shall purchase the Offered Shares at the First Closing Date, on a fully converted and diluted basis
and (y) the Company shall cause all of the outstanding Company Options of the Option Holders
pursuant to the Option Plans to be cancelled at the First Closing Date, for total consideration
consisting of the Initial Cash Consideration, the Second Installment Consideration, the Third
Installment Consideration and the Base Catchup Amount or the Adjusted Catchup Amount, as and if
applicable, as set forth below:

          (i) On the First Closing Date (as defined below) and subject to the terms and
conditions set forth in this Agreement, Buyer shall pay the Initial Cash Consideration
(minus the Deposit) to the Selling Shareholders and (on behalf of the Company) to the Option
Holders’ Representative, as set forth opposite their names in the First Closing Allocation
Schedule to be delivered by the Sellers’ Representative to Buyer;

          (ii) On the Second Closing Date (as defined below) and subject to the terms and
conditions set forth in this Agreement, Buyer shall issue and transfer to the Selling
Shareholders and (on behalf of the Company) to the Option Holders’ Representative the Second
Installment Cash Consideration (if any) and all of Buyer’s right, title and interest in and
to the Second Installment Share Consideration (if any), free and clear of all Encumbrances,
as set forth opposite their respective names in the Second Installment Allocation Schedule
to be delivered by the Sellers’ Representative to Buyer; and

          (iii) On the Third Closing Date (as defined below) and subject to the terms and
conditions set forth in this Agreement, Buyer shall issue and transfer to the Selling
Shareholders and (on behalf of the Company) to the Option Holders’ Representative the Third
Installment Cash Consideration (if any) and all of Buyer’s right, title and interest in and
to the Third Installment Share Consideration (if any) and the Additional Share Consideration
(if any), free and clear of all Encumbrances, as set forth opposite their respective names
in the Third Installment Allocation Schedule to be delivered by the Sellers’ Representative
to Buyer.

     Section 2.2 Consideration. The Aggregate Consideration shall be paid as follows:

          (a) Subject to the terms and conditions set forth in this Agreement, in reliance on the
representations, warranties, covenants and agreements of the parties contained herein and in the
Ancillary Documents and in consideration of the sale, assignment and transfer of the Offered Shares
and the cancellation of all of the Company Options of the Option Holders under the Option Plans and
the exercise or cancellation of all outstanding

12

 

warrants, including without limitation the Medley Warrants, Buyer shall on the First Closing
Date pay to the Selling Shareholders and (on behalf of the Company) to the Option Holders’
Representative as set forth opposite their respective names in the First Closing Allocation
Schedule a total amount equal to US$168,437,500 in cash (such amount, the “Initial Cash
Consideration”), minus the Deposit. The Sellers’ Representative shall deliver the First Closing
Allocation Schedule to Buyer no later than five Business Days prior to the First Closing Date.

          (b) Buyer shall pay the Selling Shareholders and (on behalf of the Company) the Option
Holders’ Representative additional consideration within five (5) Business Days following the date
on which the 2008 Audited Financial Statements are delivered to Buyer (and in any event no later
than May 15, 2009, unless the delivery of the 2008 Audited Financial Statements has been delayed
due to a failure on the part of Key Management to timely furnish the Auditors with the management
accounts required for the preparation thereof, in which case such payment shall be made within five
(5) Business Days of delivery of the 2008 Audited Financial Statements), and such additional
aggregate consideration (the “Second Installment Consideration”) shall be calculated in the
following manner:

          (i) if the 2008 Audited Annual Net Income is equal to or greater than US$9,625,000,

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	The Second 

Installment 

Consideration

	 	=
	 	(
	 	 	17.5	 	 	X
	 	2008 Audited Annual

Net Income
	 	—
	 	Initial Cash

Consideration
	 	 	)	 	 	X
	 	 	50	%

          If the 2008 Audited Annual Net Income is equal to or greater than US$20,000,000, the
figure of $20,000,000 shall be used for the 2008 Audited Annual Net Income in the above
formula. The Second Installment Consideration shall in no event be less than zero nor
greater than US$90,781,250.

          (ii) If the 2008 Audited Annual Net Income is less than US$9,625,000, Buyer shall have
the right to terminate the Key Company Employees and terminate this Agreement immediately
with no further responsibility for any payment with respect to the Second Installment
Consideration, the Third Installment Consideration, the Base Catchup Amount or the Adjusted
Catchup Amount. If, following the First Closing Date and prior to December 31, 2008, the
Amended and Restated Video Information System Cooperation Contract between Carrefour
Commercial Companies and Shanghai CGEN Digital Media Network Company Limited (the “Carrefour
Contract”) is terminated by CGEN or amended by CGEN in a manner adverse and material to the
Company or is terminated by the Carrefour Commercial Companies as a result of material
breach by the Company of the terms of the Carrefour Contract), Buyer shall have no
obligation to make any additional unmade payments on or in respect of the Second Installment
Consideration, the Third Installment Consideration, the Base Catchup Amount or the Adjusted
Catchup Amount, regardless of whether any such amounts would otherwise be payable.

          (iii) If the 2008 Audited Annual Net Income is equal to or greater than US$17,500,000,
55% of the amount by which the Second Installment Consideration exceeds US$68,906,250 shall
be payable in cash (the “Second

13

 

Installment Cash Consideration”) and the balance shall be paid by delivery of a number
of FM Ordinary Shares equal to the balance of the Second Installment Consideration divided
by the Average FM Share Price (such aggregate number of FM Ordinary Shares issued, the
“Second Installment Share Consideration”). The Second Installment Cash Consideration (if
any) and the Second Installment Share Consideration (if any) shall be issued to the Selling
Shareholders and the Option Holders’ Representative as set forth opposite their respective
names in the Second Installment Allocation Schedule to be delivered by the Sellers’
Representative to Buyer five (5) Business Days before the Second Closing Date.

          (c) Buyer shall pay the Selling Shareholders and (on behalf of the Company) the Option
Holders’ Representative additional consideration within five (5) Business Days following the date
on which the 2009 Audited Financial Statements are delivered to Buyer (and in any event no later
than May 15, 2010, unless the delivery of the 2009 Audited Financial Statements has been delayed
due to a failure on the part of Key Management to timely furnish the Auditors with the management
accounts required for the preparation thereof, in which case such payment shall be made within five
(5) Business Days of delivery of the 2009 Audited Financial Statements), and such additional
consideration (the “Third Installment Consideration”) shall be calculated in the following manner:

          (i) if the 2008 Audited Annual Net Income is equal to or greater than US$9,625,000 and the
2009 Audited Annual Net Income is equal to or greater than US$12,250,000,

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	The Third
Installment
Consideration

	 	=
	 	(
	 	2009 Audited Annual Net Income
	 	– 1
	 	 	)	 	 	X
	 	The Second

Installment

Consideration
	 

	 	 	 	 	 	 	 	 	 
	 	 	 	2008 Audited Annual Net Income
	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	0.4	 	 	 	 	 	 	 	 	 	 	 

          The Third Installment Consideration shall in no event be less than zero nor greater
than The Second Installment Consideration.

          In addition, (A) if 2008 Audited Annual Net Income is equal to or greater than
US$9,625,000 and less than US$17,500,000 and 2009 Audited Annual Net Income is greater than
US$24,500,000, Buyer shall pay the Selling Shareholders and (on behalf of the Company) the
Option Holders’ Representative additional consideration within five (5) Business Days
following the date on which the 2009 Audited Financial Statements are delivered to Buyer
(and in any event no later than May 15, 2010, unless the delivery of the 2009 Audited
Financial Statements has been delayed due to a failure on the part of Key Management to
timely furnish the Auditors with the management accounts required for the preparation
thereof, in which case such payment shall be made within five (5) Business Days of delivery
of the 2009 Audited Financial Statements) (such additional consideration the “Base Catchup
Amount”). The Base Catchup Amount shall be equal to the Base Purchase Price
(US$306,250,000) minus the Initial Cash Consideration, the Second Installment Consideration
and the Third Installment Consideration. The sum of the Initial Cash Consideration, the
Second Installment Consideration, the Third Installment Consideration and the Base Catchup
Amount shall in no event greater than US$306,250,000; or (B) if the 2008 Audited Annual Net
Income is equal to or greater than US$17,500,000 and the 2009 Audited Annual Net Income is
equal to or greater

14

 

US$28,000,000, Buyer shall pay the Selling Shareholders and (on behalf of the Company)
the Option Holders’ Representative additional consideration within five (5) Business Days
following the date on which the 2009 Audited Financial Statements are delivered to Buyer
(such additional consideration, the “Adjusted Catchup Amount”). The Adjusted Catchup Amount
shall be equal to The Adjusted Purchase Price (US$350,000,000) minus the Initial Cash
Consideration, the Second Installment Consideration and the Third Installment Consideration.
The sum of the Initial Cash Consideration, the Second Installment Consideration, the Third
Installment Consideration and the Adjusted Catchup Amount shall in no event be greater than
US$350,000,000.

          The Third Installment Consideration shall be paid by delivery of a number of FM
Ordinary Shares equal to the Third Installment Consideration divided by the Average FM Share
Price (such number of FM Ordinary Shares issued, the “Third Installment Share
Consideration”). The Third Installment Share Consideration (if any) shall be issued to the
Selling Shareholders and the Option Holders as set forth opposite their respective names in
the Third Installment Allocation Schedule.

          The Base Catchup Amount or the Adjusted Catchup Amount shall be paid by delivery of a
number of FM Ordinary Shares equal to the Base Catchup Amount or the Adjusted Catchup Amount
divided by the Average FM Share Price (such aggregate number of FM Ordinary Shares issued,
the “Additional Share Consideration”). The Additional Share Consideration (if any) shall be
issued to the Selling Shareholders and (on behalf of the Company) the Option Holders’
Representative as set forth opposite their respective names in the Third Installment
Allocation Schedule.

               (ii) if the 2009 Audited Annual Net Income is less than US$12,250,000, the Buyer will have no
further responsibility for any payment with respect to the Third Installment Consideration.

               (iii) If, at the Third Closing, the sum of the Initial Cash Consideration and the Second
Installment Cash Consideration is less than 55% of the Aggregate Consideration, part of the Third
Installment Consideration shall be paid in cash (the “Third Installment Cash Consideration”) so
that the sum of the Initial Cash Consideration, the Second Installment Cash Consideration, the
Third Installment Cash Consideration is equal to 55% of the Aggregate Consideration (including the
Adjusted Catchup Amount, if any and as applicable). The balance of the Third Installment
Consideration and the Adjusted Catchup Amount, as and if applicable, shall be by delivery of FM
Ordinary Shares as provided herein. The balance of the Third Installment Consideration and the
Adjusted Catchup Amount, as and if applicable, shall be paid by delivery of a number of FM Ordinary
Shares equal to such balance divided by the Average FM Share Price (such aggregate number of FM
Ordinary Shares issued, the “Third Installment Share Consideration”). The Third Installment Cash
Consideration (if any) and the Third Installment Share Consideration (if any) shall be issued to
the Selling Shareholders and (on behalf of the Company) the Option Holders’ Representative as set
forth opposite their respective names in the Third Installment Allocation Schedule to be delivered
by the Sellers’ Representative to the Buyer five (5) Business Days before the Third Closing Date.

15

 

     Section 2.3 First Closing.

          (a) Subject to the terms and conditions set forth in this Agreement, the closing of the
transactions contemplated by Section 2.2(a) of this Agreement (the “First Closing”) shall take
place on January 2, 2008 or if such day is not a Business Day, the next Business Day, at the
offices of Wilson Sonsini Goodrich & Rosati, Jin Mao Tower, 38F, Unit 01-04, 88 Century Boulevard,
Pudong, Shanghai 200121, People’s Republic of China (or at such other place and on such other day
and effective date as mutually agreed to by the parties hereto, the “First Closing Date”) as
specified by Buyer in a notice to the Selling Shareholders duly signed and delivered by Buyer as
promptly as practicable but in any event within five (5) Business Days following the date of the
satisfaction or waiver of all of the conditions set forth in Articles VII and VIII hereof (other
than those that are only capable of being satisfied on or as of the First Closing Date).

          (b) The Sellers’ Representative shall deliver the First Closing Allocation Schedule to Buyer
no later than five Business Days prior to the First Closing Date.

          (c) At or prior to the First Closing, each of the Selling Shareholders or the Company, as
applicable, shall deliver to Buyer the following:

          (i) share certificates evidencing the Offered Shares to be sold by such Selling
Shareholder accompanied by a duly executed instrument of transfer;

          (ii) Audited September 30, 2007 Financial Statements;

          (iii) all other previously undelivered documents required by this Agreement and the
Ancillary Documents to be delivered by such Selling Shareholder to Buyer at or prior to the
First Closing Date in connection with the transactions contemplated hereby and thereby; and

          (iv) in respect of each Group Company, the certificates of incorporation, common seal
(if it exists), share register and share certificate book (with any unissued share
certificates) and all minute books and other statutory books or such equivalent items in the
relevant jurisdiction as are kept by the relevant Group Company or are required by the Law
of the jurisdiction where such Group Company is incorporated to be kept by such Group
Company.

          (d) At the First Closing, Buyer shall deliver to the Selling Shareholders and (on behalf of
the Company) to the Option Holders the Initial Cash Consideration (minus the Deposit), as set forth
opposite their names in the First Closing Allocation Schedule in accordance with the wire transfer
instructions set forth in the First Closing Allocation Schedule. Buyer shall not be obligated to
deliver a Selling Shareholder’s portion of the Initial Cash Consideration (minus the deposit) until
such Selling Shareholder has complied with Section 2.3(c).

16

 

     Section 2.4 Second Closing.

          (a) Subject to the terms and conditions set forth in this Agreement, the closing of the
transactions contemplated by Section 2.2(b) of this Agreement (the “Second Closing”) shall take
place at the place and on the date (the “Second Closing Date”) as specified by Buyer in a notice to
the Selling Shareholders duly signed and delivered by Buyer as promptly as practicable following
the delivery of the 2008 Audited Financial Statements to Buyer (such Second Closing to take place
within five (5) Business Days following such delivery and in any event no later than May 15, 2009,
unless the delivery of the 2008 Audited Financial Statements has been delayed due to a failure on
the part of Key Management to timely furnish the Auditors with the management accounts required for
the preparation thereof, in which case such payment shall be made within five (5) Business Days of
delivery of the 2008 Audited Financial Statements).

          (b) Upon the occurrence of a Prospective Event of Change in Control after the First Closing
Date and before the Second Closing Date, Buyer shall notify the Sellers’ Representative within
three (3) Business Days of the occurrence of such Prospective Event of Change in Control, and the
Second Closing and the Third Closing may take place on an accelerated basis. Notwithstanding any
other provision of this Agreement to the contrary in the event of a Prospective Event of Change in
Control, (i) the Second Closing and the Third Closing shall take place immediately prior to the
closing of such Prospective Event of Change in Control, (ii) the Second Installment Consideration
shall be equal to US$68,906,250, payable in cash and (iii) the Third Installment Consideration
shall be equal to US$68,906,250, payable in cash.

          (c) Upon the occurrence of a Key Management Dismissal Event after the First Closing Date and
before the Second Closing Date, the Second Closing and the Third Closing shall take place on an
accelerated basis. Notwithstanding any other provision of this Agreement to the contrary, (i) the
Second Closing and the Third Closing shall take place within seven (7) Business Days of the
occurrence of the Key Management Dismissal Event, (ii) the Second Installment Share Consideration
shall be equal to US$90,781,250 divided by the Average FM Share Price, (iii) the Third Installment
Share Consideration shall be equal to US$68,906,250 divided by the Average FM Share Price and (iv)
the Additional Share Consideration shall be equal to US$21,875,000 divided by the Average FM Share
Price.

          (d) The Sellers’ Representative shall deliver the Second Installment Allocation Schedule to
Buyer no later than five (5) Business Days prior to the Second Closing Date.

          (e) At or prior to the Second Closing, Buyer shall deliver to the Sellers’ Representative for
the benefit of the Selling Shareholders and the Option Holders true copies of the register of
members of Buyer indicating the transfer to the Selling Shareholders and the Option Holders and
registration in the name of the Selling Shareholders and the Option Holders in respect of the
Second Installment Share Consideration, if any, as set forth opposite their respective names in the
Second Installment Allocation Schedule.

     Section 2.5 Third Closing.

          (a) Subject to the terms and conditions set forth in this Agreement, the closing of the
transactions contemplated by Section 2.2(c) of this Agreement (the “Third Closing”) shall take
place at the place and on the date (the “Third Closing Date”) as

17

 

specified by Buyer in a notice to the Selling Shareholders duly signed and delivered by Buyer
as promptly as practicable following the delivery of the 2009 Audited Financial Statements to Buyer
(such Third Closing to take place within five (5) Business Days following such delivery and in any
event no later than May 15, 2010, unless the delivery of the 2009 Audited Financial Statements has
been delayed due to a failure on the part of Key Management to timely furnish the Auditors with the
management accounts required for the preparation thereof, in which case such payment shall be made
within five (5) Business Days of delivery of the 2009 Audited Financial Statements).

          (b) Upon the occurrence of a Prospective Event of Change in Control after the Second Closing
Date and before the Third Closing Date, Buyer shall notify the Sellers’ Representative within three
(3) Business Days of the occurrence of such Prospective Event of Change in Control, and the Third
Closing shall take place on an accelerated basis. Notwithstanding any other provision of this
Agreement to the contrary, (i) the Third Closing shall take place immediately prior to the closing
of such Prospective Event of Change in Control and (ii) the Third Installment Consideration shall
be equal to the Base Purchase Price minus the Second Installment Consideration and the Initial Cash
Consideration, and payable in cash.

          (c) Upon the occurrence of a Key Management Dismissal Event after the Second Closing Date and
before the Third Closing Date, the Third Closing shall take place on an accelerated basis.
Notwithstanding any other provision of this Agreement to the contrary, (i) the Third Closing shall
take place within seven (7) Business Days of the occurrence of the Key Management Dismissal Event,
(ii) the Third Installment Share Consideration shall be equal to US$68,906,250 divided by the
Average FM Share Price and (iii) the Additional Share Consideration shall be equal to
US$350,000,000 minus the Initial Cash Consideration, the Second Installment Consideration and
US$68,906,250, divided by the Average FM Share Price.

          (d) The Sellers’ Representative shall deliver the Third Installment Allocation Schedule to
Buyer no later than five (5) Business Days prior to the Third Closing Date.

          (e) At or prior to the Third Closing, Buyer shall deliver to the Sellers’ Representative for
the benefit of the Selling Shareholders and the Option Holders true copies of the register of
members of Buyer indicating the transfer to the Selling Shareholders and the Option Holders and
registration in the name of the Selling Shareholders and the Option Holders in respect of the Third
Installment Share Consideration, if any, and the Additional Share Consideration, if any, as set
forth opposite their respective names in the Third Installment Allocation Schedule.

     Section 2.6 Rounding. If the result of any calculation of the number of FM Ordinary
Shares to be delivered to the Selling Shareholders and the Option Holders pursuant to any provision
of this Article II is a number that is not a whole number, such number shall be rounded up to the
next succeeding whole number.

     Section 2.7 Share Splits and Other Similar Events. Any number of shares to be
delivered pursuant to, or price per share referenced in, this Article II shall be equitably
adjusted in the event of any stock split, stock dividend, recapitalization or reorganization after
the date hereof (for the avoidance of doubt no adjustment shall be made to account for

18

 

additional issuances of shares by Buyer in connection with any capital raising transaction or
acquisitions by Buyer).

     Section 2.8 2008 and 2009 Audited Financial Statements; Disputes.

          (a) The Sellers’ Representative may dispute the amount of 2008 Audited Annual Net Income or
2009 Audited Annual Net Income in the 2008 Audited Financial Statements or the 2009 Audited
Financial Statements, as the case may be; provided, however, that the Sellers’ Representative shall
have notified Buyer in writing of such dispute setting forth, in reasonable detail, the basis for
such dispute, within fifteen (15) Business Days of Buyer’s delivery of the 2008 Audited Financial
Statements or the 2009 Audited Financial Statements, as the case may be, to the Sellers’
Representative. The Sellers’ Representative and Buyer shall attempt to reconcile their
differences, and any resolution by them as to any disputed amounts shall be final, binding and
conclusive on the parties hereto. If the Sellers’ Representative and Buyer are unable to reach a
resolution with such effect within fifteen (15) Business Days after the receipt by Buyer of the
Sellers’ Representative’s written notice of dispute, Buyer and the Sellers’ Representative shall
submit the items remaining in dispute for resolution to one of Ernst & Young, KPMG or
PricewaterhouseCoopers, as mutually acceptable to the Sellers’ Representative and Buyer (an
“Independent Accounting Firm”), which shall, within fifteen (15) Business Days after such
submission, determine and report in writing to the Sellers’ Representative and Buyer upon such
remaining disputed items and the amount of 2008 Audited Annual Net Income or 2009 Audited Annual
Net Income, as the case may be, and such written report shall be final, binding and conclusive on
the Seller Parties and Buyer. The fees and disbursements of the Independent Accounting Firm acting
under this Section 2.8 shall be borne by the Company.

          (b) The 2008 Audited Financial Statements and the 2009 Audited Financial Statements shall be
deemed final for the purposes of this Section 2.8 upon the earliest of (i) the failure of the
Sellers’ Representative to notify Buyer of a dispute within fifteen (15) Business Days of Buyer’s
delivery of the 2008 Audited Financial Statements or the 2009 Audited Financial Statements (as
applicable) to the Seller’s Representative, (ii) the resolution of all disputes, pursuant to
Section 2.8(a), by the Sellers’ Representative and Buyer and (iii) the resolution of all disputes,
pursuant to Section 2.8(a), by the Independent Accounting Firm.

          (c) (i) Buyer agrees that, notwithstanding any dispute with respect to 2008 Audited Annual Net
Income, Buyer shall pay the Second Installment Consideration in accordance with the time frame set
forth in Section 2.4(a). If Buyer pays the Second Installment Consideration pursuant to Section
2.4(a) prior to the resolution of any such dispute in accordance with Section 2.8(b) and the result
of the resolution of such dispute is that Buyer has overpaid with respect to the Second Installment
Consideration, Buyer may reduce the amount payable by Buyer as Third Installment Consideration by
the amount of such overpayment. If the result of the resolution of such dispute is that Buyer has
overpaid with respect to the Second Installment Consideration and the Third Installment
Consideration is not enough to offset such overpayment, such amount may be recovered (to the extent
paid) through the indemnification provided in Section 10.2. If the result of the resolution of
such dispute is that Buyer has underpaid with respect to the Second Installment Consideration, the
amount payable by Buyer as Third Installment Consideration shall be increased by the amount of such
underpayment.

19

 

          (ii) Notwithstanding Section 2.5(a), Buyer shall not be obligated to make any payment with
respect to the Third Installment Consideration, the Catchup Amount or the Adjusted Catchup Amount,
until any dispute with respect to the 2009 Audited Annual Net Income has been resolved in
accordance with Section 2.8(b).

     Section 2.9 Sellers’ Representative. Each Selling Shareholder hereby appoints Mr.
Yising Chan (the “Sellers’ Representative”) as such Selling Shareholder’s attorney-in-fact and
representative, (i) to do any and all things and to execute any and all documents or other papers,
in each such Selling Shareholder’s name, place and stead, in any way in which each such Selling
Shareholder could do if personally present, in connection with this Agreement and the applicable
Ancillary Documents and the transactions contemplated hereby and thereby, (ii) to amend, cancel or
extend, or waive the terms of, this Agreement and any of the Ancillary Documents in a manner that
would not disproportionately affect such Selling Shareholder as compared to the other Selling
Shareholders, (iii) to act on behalf of such Selling Shareholder with respect to any claims
(including the settlement thereof) made by Buyer or such Selling Shareholder for indemnification
pursuant to Article X or any dispute arising under Section 2.8 in a manner that would not
disproportionately affect such Selling Shareholder as compared to the other Selling Shareholders or
which does not relate to a breach by such Selling Shareholder specifically, of its representations,
warranties or obligations in connection with this Agreement and the applicable Ancillary Documents.
The power of attorney granted hereby is coupled with an interest. In the event that the Sellers’
Representative becomes unable or unwilling to continue in his or her capacity as the Sellers’
Representative under this Agreement, the Selling Shareholders shall promptly appoint a successor
Sellers’ Representative by written notice to Buyer, and the appointment of such successor Sellers’
Representative shall become effective only upon Buyer’s receipt of such written notice. Each
Selling Shareholder hereby agrees that any successor Sellers’ Representative so selected by such
Selling Shareholder shall be entitled to act as such under this Agreement on behalf of such Selling
Shareholder. All references herein to the Sellers’ Representative shall include any such successor
Sellers’ Representative. Except as otherwise expressly set forth herein, the Selling Shareholders
hereby consent to the taking by the Sellers’ Representative of any and all actions and the making
of any decisions required or permitted to be taken by such Selling Shareholders under this
Agreement. The Selling Shareholders shall be bound by all actions taken by the Sellers’
Representative in his or her capacity as the Sellers’ Representative.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES

The Seller Parties, severally and not jointly, represent and warrant to Buyer as of the date hereof
and as of the First Closing Date (except as otherwise provided) as though made as of the First
Closing Date as follows:

     Section 3.1 Due Organization, Good Standing and Power.

          (a) The Company is a company duly organized, validly existing and in good standing under the
laws of the Cayman Islands. The Company has the requisite power and authority to own, lease and
operate its assets and to conduct the business now being conducted by it and, if applicable, is
duly qualified as a foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification except where the failure to be so qualified or in good
standing would not reasonably be

20

 

expected, individually or in the aggregate, to have a Material Adverse Effect on the Company.
The Company has all requisite power and authority to enter into this Agreement and the Ancillary
Documents to which it is a party and to perform its obligations hereunder and thereunder.

          (b) The Company is a holding company. Except as set forth in Section 3.1(b) to the Disclosure
Schedule, the Company has no liabilities or obligations and is not a party to any Contract, other
than (i) this Agreement, the Ancillary Documents to which it is a party and such other Contracts as
are described in Section 3.1(b) of the Disclosure Schedule, and (ii) any liabilities or obligations
relating solely to the transactions contemplated by this Agreement, the Ancillary Documents to
which the Company is a party or the Contracts described in Section 3.1(b) of the Disclosure
Schedule.

     Section 3.2 Capitalization; Valid Issuance. The Shares set forth in Section 3.2 of the
Disclosure Schedule constitute the only issued and outstanding equity capital of the Company
including without limitation, any options and warrants and convertible bonds convertible into or
exercisable or exchangeable for Company Ordinary Shares, which represents 100% of the Company’s
equity capital. All of the Shares were duly authorized for issuance without violation of any
preemptive or similar rights and are validly issued and, except for the Company Ordinary Shares
issuable upon exercise of the stock options, fully paid and nonassessable. As of the First
Closing, the Selling Shareholders shall own 100% of such Shares (excluding the Company Options to
be cancelled in accordance with the provisions of this Agreement).

     Section 3.3 Group Companies.

          (a) Section 3.3 of the Disclosure Schedule sets forth for each of the Group Companies (i) its
jurisdiction of incorporation, formation or organization, as applicable, and (ii) the number of
authorized, issued and outstanding shares of each class of its capital stock or other authorized,
issued and outstanding equity interests, as applicable, the names of the holders thereof, and the
number of shares or percentage interests, as applicable, held by each such holder. Each of the
Group Companies is duly incorporated or formed, as applicable, validly existing and, in good
standing under the Laws of its jurisdiction of incorporation or formation, as applicable, has the
requisite corporate or other applicable organizational power and authority to own, lease and
operate its assets and to carry on its business now being conducted by it, except for such failure
to have such power or authority or to be so qualified or licensed or in good standing, as the case
may be, as would not, individually or in the aggregate, (i) adversely affect the ability of such
Group Company to conduct the Business or (ii) otherwise be reasonably expected to have a Material
Adverse Effect on the Group Companies. All the issued and outstanding shares of capital stock or
other equity interests of the Group Companies indicated as being owned by the Company in Section
3.3 of the Disclosure Schedule are owned of record, free and clear of any Encumbrances, except
Permitted Encumbrances. All of such issued and outstanding shares or other equity interests of the
Group Companies have been validly issued, are fully paid and, if applicable, nonassessable and have
not been issued in violation of any preemptive or similar rights, if any. Except as disclosed in
Section 3.3 of the Disclosure Schedule, there is no existing option, warrant, call, right,
commitment or other agreement of any character to which any Seller Party or Group Company is a
party requiring, and there are no securities of any Group Company outstanding which upon conversion
or exchange would require, the issuance, sale or transfer or repurchase or redemption or otherwise
acquisition of any additional shares of capital stock, issued or unissued, or other equity
securities of any Group Company or other

21

 

securities convertible into, exchangeable for or evidencing the right to subscribe for or
purchase shares of capital stock or other equity securities of such Group Company or relating to
dividends or voting rights. Except as contemplated by the Structure Agreements and as disclosed in
Section 3.3(a) to the Disclosure Schedule, none of the Group Companies is a party to any voting
trust, other voting agreement or Contract with respect to any of the Shares or to any agreement
relating to the issuance, sale, redemption, transfer or other disposition of the capital stock of
any Group Company.

          (b) No shares of capital stock or other equity or ownership interests of any Group Company
have been issued in violation of any rights, agreements, arrangements or commitments under any
provision of applicable Law, the certificate of incorporation or bylaws or comparable
organizational documents of any Group Company or any Contract to which any Group Company is a party
or by which such Group Company is bound.

     Section 3.4 Corporate Records. The certificates of incorporation, memorandum and
articles of association, by-laws or comparable organizational documents and business licenses of
each Group Company are in full force and effect. None of the Group Companies is in violation of
any of the provisions of its certificate of incorporation, memorandum and articles of association,
bylaws or comparable organizational documents. The transfer books and minute books of each Group
Company are true and complete in all material respects and record all the matters required to be
recorded therein.

     Section 3.5 Financial Statements.

          (a) The Company has delivered to Buyer (i) complete copies of the Company’s audited
consolidated balance sheets as of December 31, 2005 and 2006, and the related statements of
operations, shareholders’ equity and cash flows for the years ended December 31, 2005 and 2006,
together with the notes to such financial statements (the “Audited Financial Statements”), (ii)
complete copies of the Company’s reviewed consolidated balance sheet as of June 30, 2007, the
related statement of operations for the six months ended June 30, 2007 and the related statement of
shareholders’ equity and cash flows for the six months ended June 30, 2007, together with the notes
to such financial statements (the “Reviewed Financial Statements”) and (iii) complete copies of the
Company’s consolidated balance sheet as of September 30, 2007, the related statement of operations
for the nine months ended September 30, 2007 and the related statements of shareholders equity and
cash flows for the nine months ended September 30, 2007, together with the notes to such financial
statements which are attached hereto as Exhibit A (the “Unaudited Financial Statements”). The
Audited Financial Statements, the Reviewed Financial Statements and the Unaudited Financial
Statements are collectively referred to herein as the “Financial Statements”. The Financial
Statements (i) are true, correct and complete in all material respects and have been prepared in
accordance with the books and records of the Company and its Subsidiaries, (ii) have been prepared
in accordance with U.S. GAAP applied on a consistent basis throughout the periods indicated
therein, and (iii) fairly present, in all material respects, the financial condition and results of
operations and cash flows of the business of the Company and its Subsidiaries, as of and for the
periods to which they relate, subject, in the case of the Reviewed Financial Statements and the
Unaudited Financial Statements, to normal year-end audit adjustments (which are not, in the
aggregate, material to the Group Companies, taken as a whole). For the purposes hereof, the
consolidated balance sheet of the Company and its Subsidiaries as of September 30, 2007 is referred
to as the “Balance Sheet” and September 30, 2007 is referred to as the “Balance Sheet Date”. None
of the Group Companies has made any changes in its accounting methods or principles since

22

 

the Balance Sheet Date (other than with respect to provisioning for doubtful accounts and such
changes as required by Law or U.S. GAAP). The books of account and financial records of the Group
Companies have been prepared and are maintained in accordance with sound accounting practice.

          (b) Since the Balance Sheet Date, none of the Group Companies has sustained any material loss
or interference with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action, order or decree;
and, since the Balance Sheet Date, there has not been any material change in the share capital,
short-term debt or long-term debt of any of the Group Companies or any Material Adverse Change.

          (c) Except as set forth in Section 3.5(c) of the Disclosure Schedule, the Company maintains a
system of internal accounting controls that provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations, (ii) transactions are
recorded in reasonable detail, accurately and fairly reflect in all material respects the
transactions and dispositions of assets of such entity as necessary to permit preparation of
financial statements in conformity U.S. GAAP, (iii) access to material assets is permitted only in
accordance with management’s general or specific authorization, (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and appropriate actions are
taken with respect to any differences and (v) each of the Group Companies has made and kept books,
records and accounts which, in reasonable detail, accurately and fairly reflect in all material
respects the transactions and dispositions of assets of such entity and provide a sufficient basis
for the preparation of financial statements in accordance with U.S. GAAP.

          (d) There are no liabilities of any kind whatsoever (whether absolute, accrued, contingent or
otherwise and whether due or to become due) of the Group Companies that would be required to be
reflected in, or disclosed in the notes to, financial statements prepared in accordance with U.S.
GAAP other than liabilities and obligations (i) reflected or reserved against on the Balance Sheet
or disclosed in the notes thereto, (ii) arising in the ordinary course of the business of the Group
Companies since the Balance Sheet Date or (iii) that would not, individually or in the aggregate,
reasonably be expected to be material to the Group Companies, taken as a whole.

     Section 3.6 Authorization, Enforceability, No Approvals or Conflicts.

          (a) The execution and delivery by the Company of this Agreement and the Ancillary Documents to
which it is a party and the performance by the Company of its obligations hereunder and thereunder
have been duly authorized by all necessary corporate or other applicable organizational action of
the Company. Each of this Agreement and the Ancillary Documents to which it is a party has been
duly executed and delivered by the Company and, assuming due authorization, execution and delivery
by the other party/parties thereto, constitutes a valid and binding agreement of the Company,
enforceable against it in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar Laws relating to or
affecting creditors’ rights generally and general equitable principles (whether considered in a
proceeding in equity or at Law).

          (b) Except as set forth in Section 3.6(b) to the Disclosure Schedule, the execution, delivery
and performance by the Company of this Agreement and the Ancillary

23

 

Documents to which it is a party, and the consummation by the Company of the transactions
contemplated hereby and thereby do not and will not (i) violate, conflict with or result in a
breach of the organizational documents of any of the Group Companies, (ii) violate, conflict with
or result in a breach of, or constitute a default by any of the Group Companies (or create an event
which, with notice or lapse of time or both, would constitute a default) or give rise to any right
of termination, cancellation or acceleration under, or result in the creation of any Encumbrance
upon any of the properties of any of the Group Companies or on the Shares under, any note, bond,
mortgage, indenture, deed of trust, license, franchise, permit, lease, contract, agreement or other
instrument to which any of the Group Companies or any of their respective properties is bound or
(iii) violate or result in a breach of any Governmental Order or Law applicable to any of the Group
Companies or any of their respective properties, except, with respect to the foregoing clauses (ii)
and (iii) above, as would not reasonably be expected to have a Material Adverse Effect on the Group
Companies, or as would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the ability of the Company to consummate the transactions contemplated
by this Agreement or the Ancillary Documents to which it is a party. Except as set forth on
Section 3.6(b) to the Disclosure Schedule, no Governmental Authorizations are required for the
execution, delivery and performance by the Group Companies of this Agreement and the consummation
of the transaction by the Seller Parties.

     Section 3.7 Compliance with Law; Governmental Authorizations. Except as would not
reasonably be expected to have a Material Adverse Effect on the Group Companies and none of the
Group Companies is in violation of any Governmental Order or Law applicable to them or any of their
respective properties.

     Section 3.8 Licenses. Each of the Group Companies has obtained all licenses,
franchises, concessions, consents, authorizations, approvals, orders, certificates and permits of
and from, and has made all declarations and filings with, all Governmental Authorities necessary to
own, lease, license and use its properties and assets and conduct its business in the manner
currently conducted and such licenses, consents, authorizations, approvals, orders, certificates or
permits contain no materially burdensome restrictions or conditions for the conduct of the Business
as currently conducted. To the Knowledge of Seller Parties, no regulatory body is considering
modifying, suspending or revoking any such licenses, consents, authorizations, approvals, orders,
certificates or permits and each of the Group Companies is in material compliance with the
provisions of all such licenses, consents, authorizations, approvals, orders, certificates or
permits.

     Section 3.9 Litigation. There are no suits, actions, arbitrations, proceedings or
investigations pending or, to the Knowledge of Seller Parties, threatened against any of the
Company and the Group Companies.

     Section 3.10 Absence of Certain Changes. Since the Balance Sheet Date and through the
date of this Agreement, the Business has been conducted in all material respects only in the
ordinary course consistent with past practice. Without limiting the generality of the foregoing and
since the Balance Sheet Date and through the date of this Agreement, there has not been:

          (a) any damage, destruction or loss (whether or not covered by insurance) materially affecting
the business or assets of the Group Companies;

24

 

          (b) any sale, purchase, option, subscription, warrant, call, commitment or agreement of any
character granted or made by any of the Group Companies in respect of its capital stock or other
equity interests, other than the granting of Company Options in the ordinary course of business;

          (c) any declaration, setting aside or payment of any dividend or other distribution in respect
of any shares of capital stock of any Group Company or any repurchase, redemption or other
acquisition by any Group Company of any outstanding shares of capital stock or other securities of,
or other ownership interest in, any Group Company;

          (d) any material loans, advances or capital contributions to, or investments in, any Person or
payment of any fees or expenses to any Seller Party or any Affiliate of any Seller Party other than
salaries and normal business expenses paid to employees in the ordinary course of business;

          (e) any acquisition of assets or disposition of assets by any of the Group Companies,
excluding (i) any single acquisition or disposition of assets, which does not exceed RMB2,000,000
and (ii) one or more related acquisitions or dispositions of assets, the aggregate value of which
does not exceed RMB10,000,000;

          (f) any merger or consolidation by any of the Group Companies with any Person;

          (g) other than in the ordinary course of business, capital expenditures by any of the Group
Companies, which in the aggregate exceed RMB1,000,000;

          (h) any incurrence, assumption or guarantee of any Indebtedness for borrowed money by any of
the Group Companies, which in aggregate exceeds RMB1,000,000;

          (i) any Encumbrance of material assets of any of the Group Companies, other than Permitted
Encumbrances;

          (j) other than in the ordinary course of business, any increase in the compensation of
employees of any of the Group Companies;

          (k) any loan made by any of the Group Companies to any director, officer or other member of
senior management of any of the Group Companies other than reasonable travel and business expense
advances incurred in the ordinary course of business;

          (l) any material change in the accounting methods or practices followed by any of the Group
Companies (other than such changes that have been required by Law or U.S. GAAP); or

          (m) any agreement or commitment by any of the Group Companies to do any of the foregoing.

25

 

     Section 3.11 Tax Matters. Except as set forth in Section 3.11 to the Disclosure
Schedule

          (a) All Tax Returns required to be filed pursuant to applicable Law by or on behalf of any
Group Company have been filed in a timely manner (within any applicable extension periods) and are
true, correct and complete in all material respects, (ii) all Taxes of the Group Companies have
been timely paid in full or will be timely paid in full by the due date thereof if due prior to the
First Closing Date, except for those contested in good faith, and the Group Companies have
adequately provided for all Taxes in the Financial Statements for which they are required to
provide, (iii) none of the Group Companies has liability for Taxes in excess of the accruals for
Taxes reflected on the Financial Statements to the extent such Taxes are required to be accrued
under U.S. GAAP and (iv) no unresolved claims have been asserted in writing by a Taxing Authority
with respect to any Taxes of any of the Group Companies;

          (b) Each of the Group Companies is and has been in compliance with all applicable Laws
relating to the payment, withholding and exemptions of Taxes and has duly and timely withheld from
employee salaries, wages and other compensation and has paid over to the appropriate Taxing
Authorities all amounts required to be so withheld and paid over for all periods prior to and
including the First Closing Date under all applicable Laws;

          (c) No submissions made to any Taxing Authority in connection with obtaining Tax exemptions,
Tax holidays or reduced Tax rates contained any material misstatement or omission that would have
affected the granting of such Tax exemptions, Tax holidays or reduced Tax rates;

          (d) No written claim has been made by any Taxing Authority in any jurisdiction where a Group
Company does not file Tax Returns that it is or may be subject to Tax by that jurisdiction. No
extensions or waivers of statutes of limitations with respect to any Tax Returns have been given by
or requested from any Group Company. There are no audits or investigations by any Taxing Authority
of any of the Group Companies in progress nor, to the Knowledge of Seller Parties, does any Group
Company have actual knowledge of any pending or threatened audit or investigation by any Taxing
Authority;

          (e) All deficiencies asserted or assessments made against any Group Company as a result of any
examinations by any Taxing Authority have been fully paid in accordance with their stipulated due
date;

          (f) No Group Company is a party to any tax indemnity, tax allocation or tax sharing or similar
agreement or arrangement (whether or not written) pursuant to which it could have any obligation to
make any payments after the First Closing; and

          (g) Other than in respect of Taxes not yet due and payable, there are no Encumbrances for
Taxes upon the assets of any Group Company.

     Section 3.12 Dividends and Distributions.

          (a) Retained earnings of CGEN Network, for purposes of declaring and paying dividends, were
computed in accordance with PRC GAAP and all dividends paid were declared and paid according to the
laws and regulations of the PRC as then in effect. No such dividends or other distribution were
subject to withholding or other tax under the

26

 

laws and regulations of the PRC that were not paid or withheld and were otherwise free and
clear of any other tax, withholding or regulations in the PRC that were not otherwise paid,
withheld or complied with (as the case may be). CGEN Network has received the necessary
governmental approvals, certificates, permits and other similar permission to pay such dividends as
it has as of the date of this Agreement.

          (b) All contractual and other payments made by the Group Companies (other than CGEN Network)
to CGEN Network have been made according to the terms and conditions of the Structure Agreements
and no such payments have been subject to withholding taxes under the laws and regulations of the
PRC that have not been withheld and have been otherwise free and clear of any withholding tax in
the PRC that were not otherwise withheld.

     Section 3.13 Officers, Employees and Labor.

          (a) Each of the Group Companies has complied in all material respects with all applicable Laws
relating to the employment of labor, including provisions thereof relating to wages, hours, social
welfare, equal opportunity and collective bargaining. There is no organized labor dispute or claim
pending, or to the Knowledge of the Seller Parties, threatened, against or affecting any of the
Group Companies. There is no organized labor strike or slowdown pending, or to the Knowledge of the
Seller Parties, threatened, against or affecting any of the Group Companies. None of the Group
Companies has any Contract with any labor union.

          (b) Section 3.13(b)of the Disclosure Schedule sets forth a list of all officers of the Group
Companies and all other employees and consultants whose current annual salary or rate of
compensation (including bonuses and commissions) is in excess of RMB1,000,000 (or equivalent in a
different currency), together with their current job titles or relationship to the Group Companies.
The Company does not have any employees in the Cayman Islands.

          (c) To the Knowledge of the Seller Parties, none of the employees of the Group Companies is
obligated under any Contract, or subject to any Governmental Order that would prevent such
employees from assigning to a Group Company inventions conceived or reduced to practice or
copyrights for materials developed in connection with services rendered to the Group Company. The
following do not or will not, as the case may be, conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any Contract between any Group Company
and such employee: (i) the execution, delivery and performance of any of this Agreement and the
Ancillary Documents to which any of the Seller Parties is a party and (ii) the conduct of the
Business of any Group Company as currently conducted.

          (d) Other than the acceleration of the Company’s stock options as disclosed to Buyer, none of
the execution, delivery and performance of any of this Agreement and the Ancillary Documents to
which any of the Seller Parties is a party will constitute an event under any benefit plan or
individual agreement that will or may result in any payment (whether of severance pay or
otherwise), acceleration, vesting or increase in material benefits with respect to any employee,
former employee, consultant, agent or director of the Group Companies.

27

 

          (e) Except as set forth in Section 3.13(e) to the Disclosure Schedule and except as required
by applicable Laws, none of the Group Companies has any obligation or liability to provide
retirement, death, disability or other welfare benefits to any of the present or past employees of
the Group Companies, or to any other person.

          (f) (i) There is no unfair labor practice complaint pending or, to the Knowledge of the Seller
Parties, threatened against any of the Group Companies before any competent Governmental Authority;
and (ii) except as would not reasonably be expected to have a Material Adverse Effect on the Group
Companies, there has been no violation of any laws, regulations, rules, orders, decrees,
guidelines, judicial interpretations, notices or other legislation of the Cayman Islands, the PRC,
the United States or any other jurisdiction applicable to any of the Group Companies relating to
discrimination in the hiring of employees, social welfare benefits, equal opportunity, collective
bargaining, promotion or pay of employees, applicable wage or hour laws, the payment or withholding
of payroll or similar taxes for employees, or any other applicable law or regulation concerning the
employees of the Group Companies.

     Section 3.14 Loans. Except as described in the Structure Agreements, none of the Group
Companies has, directly or indirectly (A) extended credit, arranged to extend credit, or renewed
any extension of credit, in the form of a personal loan, to or for any director or executive
officer of the Seller Parties and the Group Companies, or to or for any family member or Affiliate
of any director or executive officer of the Seller Parties and the Group Companies or (B) made any
material modification, including any renewal thereof, to any term of any personal loan to any
director or executive officer of the Seller Parties or the Group Companies, or any family member or
Affiliate of any such director executive officer, which loan was outstanding as of the date hereof.

     Section 3.15 Share Option and Other Plans. (a) Except as set forth in Section 3.15 of
the Disclosure Schedule, none of the Group Companies has any pension, profit sharing, stock option,
employee stock purchase, severance or other plan, program, policy, practice or Contract providing
for incentives or other compensation which has been maintained, contributed to, or required to be
contributed to by any Group Company for the benefit of any current or former employees, directors
or consultants (aside from any salary or commission payable in the ordinary course), or any other
employee benefit plan with respect to which any Group Company has or may have any liability or
obligation. Except for required contributions or benefit accruals for the current plan year, no
material liability has been or is expected to be incurred by any of the Group Companies under or
pursuant to any applicable Law relating to benefit plans and, to the Knowledge of Seller Parties,
no event, transaction or condition has occurred or exists that is reasonably likely to result in
any such material liability to any of the Group Companies. Except as set forth in Section 3.15 to
the Disclosure Schedule, the Company and the Group Companies have performed in all material
respects all obligations required to be performed by them under, are not in default or violation
of, and to the Knowledge of Seller Parties there is not any default or violation by any other party
to each plan, program, policy, practice or Contract set forth in Section 3.17 of the Disclosure
Schedule, and each has been established and maintained in all material respects in accordance with
its terms and in compliance with applicable Laws.

          (b) At the First Closing, all unexercised Company Options shall be cancelled.

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     Section 3.16 Intellectual Property.

          (a) The Group Companies own or have the rights to use all Intellectual Property material to
the Business.

          (b) To the Knowledge of Seller Parties, none of the Group Companies has taken any action or
failed to take any action that could reasonably be expected to result in the abandonment,
cancellation, forfeiture, relinquishment, invalidation or unenforceability of any of the registered
Intellectual Property material to the Business (including the failure to pay any filing,
examination, issuance, post-registration and maintenance fees, annuities and the like).

          (c) Each contract or license pursuant to which (i) any third Person has granted to any Group
Company a license or rights to any material Intellectual Property or (ii) any Group Company has
granted to a third Person any license or rights to any material Intellectual Property owned by any
Group Company, is in full force and effect, and none of the Group Companies is in material default
under any of such licenses and, to the Knowledge of Seller Parties, no other Person who is a party
to any of such licenses is in material default thereunder or has exercised any termination rights
with respect thereto (such contracts and licenses the “IP Licenses”).

          (d) None of the operations, conduct or products of any Group Company infringes upon or is in
violation of any Intellectual Property of any Person.

          (e) No Group Company is a party to any pending legal proceedings which involve a claim of
infringement, unauthorized use, or violation of any intellectual property right by any Person
against such Group Company or challenging the ownership, use, validity or enforceability of, any
material Intellectual Property owned by or exclusively licensed to such Group Company, and (ii) no
Group Company has received any notice or claim challenging a Group Company ownership of any of the
Intellectual Property owned (in whole or in part). No Intellectual Property owned by or licensed to
the Group Companies is subject to any outstanding order, judgment or decree restricting the use or
licensing thereof by the Group Companies.

          (f) To the Knowledge of Seller Parties, no Person is infringing, violating, misusing or
misappropriating any Intellectual Property owned by any Group Company, except for such
infringement, violation, misuse or misappropriation as would not reasonably be expected to have a
Material Adverse Effect on the Group Companies, and no written claims to such effect have been made
against any Person by any Group Company.

          (g) To the Knowledge of Seller Parties, the consummation of the transactions contemplated
hereby and by the Ancillary Documents to which any Seller Party is a party will not result in the
loss or impairment of any Group Company’s right to own or use any of the material Intellectual
Property owned by any Group Company.

     Section 3.17 Contracts.

          (a) Except as set forth in Section 3.17 of the Disclosure Schedule, none of the Group
Companies is bound by (i) any Contract which contains restrictions with respect to payment of
dividends or any other distribution in respect of its capital stock, partnership interests or
membership interests; (ii) any Contract requiring the applicable Group Company

29

 

to make future capital contributions to any entity; (iii) any Contract relating to
Indebtedness of the applicable Group Company in excess of RMB2,000,000; (iv) any loan or advance by
a Group Company to, or investment by a Group Company in, any Related Party; (v) any loan or advance
in an amount in excess of RMB500,000 (either individually or in the aggregate) to, or investment by
a Group Company in, any Person other than a Related Party; (vi) any management, service, consulting
or any other similar type of Contract requiring payment of fees in excess of RMB500,000 per annum;
(vii) any material warranty, guaranty or similar undertaking with respect to contractual
performance extended by any Group Company other than in the ordinary course of business; (viii) any
IP License that is material to the business of any Group Company; (ix) any Contract involving
payment in excess of RMB2,000,000 per annum that cannot be terminated by a Group Company that is a
party to such Contract without material liability upon less than ninety (90) days’ notice; (x) any
Contract that governs any joint venture, partnership or other cooperative arrangement or any other
relationship involving a sharing of profits; (xi) any Contract that would result in the merger with
or into or consolidation into another Person; (xii) any Contract for the sale of any of the assets
of any Group Company with a sale price in excess of RMB250,000; (xiii) any material Contract that
requires a consent to or otherwise contains a provision relating to a “change in control”, or any
Contract that would prohibit or delay the consummation of the transactions contemplated by this
Agreement or the Ancillary Documents to which the Company is a Party or that would trigger, give
rise to, accelerate or augment any liabilities or terminate or modify any rights of any Group
Company as a result of the consummation of the transactions contemplated hereby and thereby; (xiv)
any Contract that restricts the Group Companies from engaging in any line of business in any
geographic area or competing with any Person that materially impairs the operation of the Group
Companies, individually or taken as whole; (xv) any Contract with Carrefour Commercial Companies or
Wal-Mart (China) Investment Company, Ltd or any of their respective Subsidiaries or Affiliates; or
(xvi) any material amendment, modification or supplement in respect of any of the foregoing made
other than in the ordinary course of business consistent with past practice (each of (i) to (xvi)
above, a “Material Contract”).

          (b) Other than Material Contracts which have terminated or expired in accordance with their
terms, each Material Contract is a valid and binding agreement of the relevant Group Company and,
to the Knowledge of the Seller Parties, each of the other parties thereto, enforceable against the
Group Company in accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar Laws relating to or affecting
creditors’ rights generally, and general equitable principles (whether considered in a proceeding
in equity or at Law). Except as set forth in Section 3.17 of the Disclosure Schedule, neither the
Company nor any Subsidiary is in breach of, or default under, any Material Contract to which it is
a party, except for such breaches or defaults that would not have a Material Adverse Effect on the
Group Companies.

     Section 3.18 Certain Transactions. (i) None of the Group Companies is indebted, either
directly or indirectly, to any Related Party in an aggregate amount in excess of RMB100,000 other
than for payment of salary for services rendered and reasonable expenses, (ii) no Related Party is
indebted to any of the Group Companies or has any direct or indirect ownership interest (other than
as a result of any ownership interest held in the Company) in any of the Group Companies, (iii) to
the Knowledge of Seller Parties, no Related Party has any direct or indirect ownership interest
(other than an equity interest of 5% or less in a publicly traded company), or contractual
relationship, with any Person with which any of the Group Companies has a material business
relationship or any Person which, directly or

30

 

indirectly, competes with any of the Group Companies, and (iv) no Related Party is, directly
or indirectly, a party to any material Contract with any Group Company.

     Section 3.19 Structure Agreements. Section 3.19 of the Disclosure Schedule sets forth
all of the Structure Agreements, which constitute all of the agreements, contracts and instruments
enabling the Company to effect control over and consolidate with its financial statements each
Group Company. Each of the Group Companies which is a party to the Structure Agreements has full
power, authority and legal right to execute, deliver and perform their respective obligations under
each of the Structure Agreements to which it is a party, and has authorized, executed and delivered
each of the Structure Agreements to which it is a party, and such obligations constitute valid,
legal and binding obligations enforceable against it in accordance with the terms of each of the
Structure Agreements, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights
generally, and general equitable principles (whether considered in a proceeding in equity or at
Law). The execution, delivery and performance of each Structure Agreement by the parties thereto
did not and is not reasonably expected to (i) result in any violation of the business license,
articles of association, other constitutional documents (if any) or permits of the Group Companies;
(ii) result in any violation of or penalty under any laws, regulations, rules, orders, decrees,
guidelines, judicial interpretations, notices or other legislation of the PRC as in effect as of
the date hereof; or (iii) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any other Contract, license, indenture, mortgage,
deed of trust, loan agreement, note, lease or other agreement or instrument in effect as of the
date hereof to which any of them is a party or by which any of them is bound or to which any of
their property or assets is subject; except, in the case of clause (ii) and (iii), as would not
reasonably be expected to have a Material Adverse Effect on the Group Companies. Each Structure
Agreement is in full force and effect and none of the Group Companies which is a party to any
Structure Agreement is in breach or default in the performance or observance of any of the terms or
provisions thereof. To the Knowledge of the Seller Parties, none of the parties to any Structure
Agreement has sent or received any written communication regarding termination of, or intention not
to renew, any of the Structure Agreements, and no such termination or non-renewal has been
threatened by any of the parties thereto. No breach or default under any of the Structure
Agreements by any Group Company will occur as a result of the execution, delivery and performance
of this Agreement or any Ancillary Document to which the Company is a party. Except as set forth
in Section 3.19 of the Disclosure Schedule consummation of the transactions contemplated by this
Agreement and the Ancillary Documents to which the Company is a party will not (and will not give
any Person a right to) terminate or modify any rights of, or accelerate or augment any obligation
of, any Group Company under any Structure Agreement.

     Section 3.20 Compliance with Laws.

          (a) None of the Group Companies has received any written notice or other communication from
any Governmental Authority since the Balance Sheet Date regarding (A) any actual, alleged, or
potential violation of, or failure to comply with, any applicable Law, or (B) any actual, alleged,
or potential obligation on the part of any Group Company to undertake, or to bear all or any
portion of the cost of, any remedial action of any nature.

          (b) None of the Group Companies or any director, officer, agent, employee, or any other Person
associated with or acting for or on behalf of the foregoing, has offered, paid, promised to pay, or
authorized the payment of any money or corporate fraud, or

31

 

offered, given a promise to give, or authorized the giving of anything of value, to any
Government Official, to any political party or official thereof or to any candidate for political
office (or to any Person where such Group Company, director, officer, agent, employee or other
Person knew that all or a portion of such money or thing of value would be offered, given or
promised, directly or indirectly, to any Government Official, political party, party official, or
candidate for political office) for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to a political activity, or for the purpose of:

     (i) (x) influencing any act or decision of such Government Official, political party, party
official, or candidate in his or its official capacity, (y) inducing such Government Official,
political party, party official or candidate to do or omit to do any act in violation of the lawful
duty of such Government Official, political party, party official or candidate, or (z) securing any
improper advantage, or (ii) inducing such Government Official, political party, party official, or
candidate to use his or its influence with any Governmental Authority to affect or influence any
act or decision of such Governmental Authority, in order to assist such Group Company in obtaining
or retaining business for or with, or directing business to any Group Company.

          (c) To the Knowledge of Seller Parties, none of the beneficial owners of any interest in any
Group Company is controlled by a Governmental Authority.

     Section 3.21 Environmental Matters.

     Except as would not reasonably be expected to have a Material Adverse Effect on the Group
Companies:

          (a) Each of the Group Companies is in compliance with all applicable Environmental Laws.

          (b) None of the Group Companies has received any Environmental Claim or notice of any
threatened Environmental Claim.

          (c) None of the Group Companies has entered into, has agreed to, or is subject to, any decree
or order or other similar requirement of any Governmental Authority under any Environmental Laws.

          (d) None of the Group Companies has released Hazardous Materials into the environment in
violation of Environmental Laws or in a manner that would reasonably be expected to result in
material liability under Environmental Laws, and to the Knowledge of Seller Parties, no other
Person has released Hazardous Materials into the environment at any property currently owned or
operated by any of the Group Companies in violation of Environmental Laws or in a manner that would
reasonably be expected to result in material liability to any of the Group Companies under
Environmental Laws.

     Section 3.22 Insurance. Set forth in Section 3.22 of the Disclosure Schedule is a list
of the insurance policies of each of the Group Companies as of the date hereof. All such insurance
policies are in full force and effect. There are no material claims by the Group Companies under
any such insurance policy as to which any insurance policy is denying liability or defending under
a reservation of rights clause.

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     Section 3.23 Personal Property Assets.

          (a) Each of the Group Companies has good title to, or holds by valid and existing lease or
license, all the material tangible personal property assets reflected as assets of the Group
Companies on or assets acquired after the Balance Sheet Date, free and clear of all Encumbrances
except for Permitted Encumbrances.

          (b) The Group Companies own, or have valid leasehold interests in, all material tangible
personal property assets necessary for the conduct of the Business as currently conducted and all
such assets are in reasonably good maintenance, operating condition and repair, normal wear and
tear excepted, other than machinery and equipment under repair or out of service in the ordinary
course of business.

     Section 3.24 Real Property.

          (a) Leased Properties. Section 3.24(a) of the Disclosure Schedule lists all real property
leased or subleased by any of the Group Companies as office space. With respect to each such lease
and sublease:

          (i) such lease or sublease is in full force and effect, in all material respects,
assuming the respective lessor holds valid title certificate to such properties; and

          (ii) (A) No Group Company is, and to the Knowledge of Seller Parties, no other party to
the lease or sublease is, in material default beyond any applicable notice, grace or cure
period and (B) none of the Group Companies has received a written notice of default with
respect to such lease or sublease.

          (b) Land Use Rights. None of the Group Companies owns or has legal or equitable title in any
real property.

     Section 3.25 No State Assets. None of the assets of the Group Companies constitute
state-owned assets and, accordingly, are not required to undergo any form of valuation under
applicable Law in the PRC governing the transfer of state-owned assets prior to the consummation of
the transactions contemplated herein or in any of the Ancillary Documents to which the Company is a
party.

     Section 3.26 Brokers. Except as set forth in Section 3.26 of the Disclosure Schedule,
no finder, broker, agent, financial advisor or other intermediary has acted on behalf of the Seller
Parties, the Group Companies or any of their respective Affiliates in connection with the
negotiation or consummation of this Agreement or the Ancillary Documents to which the Company is a
party, or any of the transactions contemplated hereby or thereby.

     Section 3.27 No Other Representations and Warranties.

          (a) Except for the representations and warranties contained in this Article III, the Company
makes no other express or implied representation or warranty to Buyer.

          (b) Except for the representations and warranties contained in this Article III and (with
respect to the Management Shareholder) in Article IV, the Management Parties make no other express
or implied representation or warranty to Buyer.

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ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS

     Each of the Selling Shareholders, severally and not jointly, represents and warrants to Buyer
as of the date hereof and as of the First Closing Date (except as otherwise provided) as though
made as of the First Closing Date as follows:

     Section 4.1 Authorization, Enforceability. Such Selling Shareholder that is not an
individual has been duly organized, is validly existing, and is in good standing in its
jurisdiction of organization, has the corporate power and authority to execute and deliver this
Agreement and the Ancillary Documents to which it is a party and perform its obligations hereunder
and thereunder. The execution and delivery of this Agreement and the Ancillary Documents to which
it is a party by such Selling Shareholder and the performance by such Selling Shareholder of its
respective obligations hereunder and thereunder have been duly authorized by all necessary
corporate or other applicable organizational action on the part of each such party. Each of this
Agreement and the Ancillary Documents to which it is a party has been duly executed and delivered
by such Selling Shareholder and, assuming due authorization, execution and delivery by the other
party/parties thereto, constitutes a valid and binding agreement of such Selling Shareholder,
enforceable against it in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar Laws relating to or
affecting creditors’ rights generally and general equitable principles (whether considered in a
proceeding in equity or at Law).

     Section 4.2 Ownership and Transfer of Offered Shares. Such Selling Shareholder is the
only record and beneficial owner of the Offered Shares held by such Selling Shareholder and has
valid title to such Offered Shares, free and clear of any and all Encumbrances other than
restrictions set forth in the Company’s Shareholders Agreement dated December 7, 2006 (to the
extent such Selling Shareholder is a party thereto, or otherwise bound thereby), which restrictions
will terminate as of the First Closing. Such Selling Shareholder has the corporate or other
applicable organizational power and authority to sell, transfer, assign and deliver such Offered
Shares as provided in this Agreement, and such delivery will convey to Buyer valid title to such
Offered Shares, free and clear of any and all Encumbrances.

     Section 4.3 No Approvals or Conflicts. The execution, delivery and performance by
such Selling Shareholder of this Agreement and the Ancillary Documents to which it is a party, and
the consummation by such Selling Shareholder of the transactions contemplated hereby and thereby do
not and will not (i) violate, conflict with or result in a breach by such Selling Shareholder of
the organizational documents of such Selling Shareholder, (ii) violate, conflict with or result in
a breach of, or constitute a default by such Selling Shareholder (or create an event which, with
notice or lapse of time or both, would constitute a default) or give rise to any right of
termination, cancellation or acceleration under, or result in the creation of any Encumbrance upon
such properties of such Selling Shareholder or on the Shares held by such Selling Shareholder under
any note, bond, mortgage, indenture, deed of trust, license, franchise, permit, lease, Contract,
agreement or other instrument to which such Selling Shareholder or any of its respective properties
is bound, (iii) violate or result in a breach of any Governmental Order or Law applicable to such
Selling Shareholder or any of its properties or (iv) except as set forth in Section 4.3 of the
Disclosure Schedule, require any order, consent, approval or authorization of, or notice to, or
declaration, filing, application, qualification or registration by such Selling Shareholder with,
any Governmental Authority, except, with respect to the foregoing clauses (ii), (iii) and (iv)
above, as would not,

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individually or in the aggregate, reasonably be likely to have a material adverse effect on
the ability of such Selling Shareholder to consummate the transactions contemplated by this
Agreement or the Ancillary Documents to which it is a party.

     Section 4.4 No Competition. If such Selling Shareholder is a Management Shareholder,
(i) such Selling Shareholder does not, nor does any Related Party of such Selling Shareholder, have
any direct or indirect ownership interest (other than an equity interest of 5% or less in a
publicly traded company), or contractual relationship, with any Person which, directly or
indirectly, competes with any of the Group Companies, and (ii) neither such Selling Shareholder nor
any of its Related Parties is, directly or indirectly, a party to any Contract (or, to the
Knowledge of any Seller Party, any oral material Contract) with any Group Company.

     Section 4.5 Brokerage. Other than as disclosed in Section 3.26 of the Disclosure
Schedule, there are no contracts, agreements or understandings between such Selling Shareholder and
any person that would give rise to a valid claim against such Selling Shareholder or Buyer for a
brokerage commission, finder’s fee or other like payment in connection with the offer and sale of
the Offered Shares.

     Section 4.6 Investment. Such Selling Shareholder confirms that any FM Ordinary Shares
to be received by such Selling Shareholder will be acquired for investment for the account of such
Selling Shareholder, not as a nominee or agent, and not with a view to the sale or distribution of
any part thereof, and that such Selling Shareholder has no present intention of selling, granting
any participation in, or otherwise distributing any of the FM Ordinary Shares, except in a manner
consistent with the Registration Rights Agreement (defined in Section 7.5). By executing this
Agreement, such Selling Shareholder further represents that it has no contract, undertaking,
agreement, or arrangement with any person to sell, transfer, or warrant participation to that
person or to any third person, with respect to any of the FM Ordinary Shares.

     Section 4.7 Accredited Investor; Foreign Investor. Such Selling Shareholder represents
that such Selling Shareholder is not involved in a plan or scheme designed to evade the
registration provisions of the Securities Act and either (a) presently qualifies, and will as of
the First Closing Date, qualify, as an “accredited investor” within the meaning of Regulation D of
the rules and regulations promulgated under the Securities Act or (b) is not presently, and will
not be as of the First Closing Date, a “U.S. person” within the meaning of Regulation S of the
rules and regulations promulgated under the Securities Act.

     Section 4.8 No Other Representations and Warranties.

          (a) Except for the representations and warranties contained in this Article IV, the Selling
Shareholders (other than the Management Shareholder) make no other express or implied
representation or warranty to Buyer.

          (b) Except for the representations and warranties contained in this Article IV and in Article
III, the Management Shareholder makes no other express or implied representation or warranty to
Buyer.

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ARTICLE V.

REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer hereby represents and warrants to the Seller Parties and the Other Selling Shareholders
as of the date hereof and as of the First Closing Date (except as otherwise provided) as though
made as of the First Closing Date as follows:

     Section 5.1 Organization. Buyer is a corporation duly incorporated, validly existing
and in good standing under the Laws of the Cayman Islands. Buyer has all requisite corporate power
and authority to own its assets and to carry on its business as now being conducted by it and is
duly qualified or licensed to do business and is in good standing in the jurisdictions in which the
ownership of its property or the conduct of its business requires such qualification or license,
except where the failure to be so qualified or licensed would not reasonably be expected,
individually or in the aggregate, to have a material adverse effect on the ability of Buyer to
consummate the transactions contemplated by this Agreement and by the Ancillary Documents to which
it is a party, and would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect on Buyer.

     Section 5.2 Authorization, Enforceability. Buyer has the corporate power and authority
to execute and deliver this Agreement and the Ancillary Documents to which it is a party and
perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and
the Ancillary Documents to which it is a party by Buyer and the performance by it of its
obligations hereunder and thereunder have been duly authorized by all necessary corporate action on
the part of Buyer and no other corporate or stockholder proceedings or actions are required to
consummate the transactions contemplated hereby. This Agreement has been duly executed and
delivered by Buyer and, assuming due authorization, execution and delivery by the other parties
thereto, constitutes a valid and binding agreement of Buyer, enforceable against it in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights
generally and general equitable principles (whether considered in a proceeding in equity or at Law)
and subject to the effect of public policy on the enforceability of the indemnification provisions
in connection with registration rights provided to Selling Shareholders.

     Section 5.3 No Approvals or Conflicts. The execution, delivery and performance by
Buyer of this Agreement and the Ancillary Documents to which it is a party and the consummation by
Buyer of the transactions contemplated hereby and thereby do not and will not (i) violate, conflict
with or result in a breach by Buyer of the certificate of incorporation or memorandum and articles
of association of Buyer, (ii) violate, conflict with or result in a breach of, or constitute a
default by Buyer (or create an event which, with notice or lapse of time or both, would constitute
a default) or give rise to any right of termination, cancellation or acceleration under, or result
in the creation of any Encumbrance upon any of the properties of Buyer under, any note, bond,
mortgage, indenture, deed of trust, license, franchise, permit, lease, contract, agreement or other
instrument to which Buyer or any of its properties may be bound, (iii) violate or result in a
breach of any Governmental Order or Law applicable to Buyer or any of its properties or (iv)
require any order, consent, approval or authorization of, or notice to, or declaration, filing,
application, qualification or registration with, any Governmental Authority, except, with respect
to the foregoing clauses (ii), (iii) and (iv) above, as would not reasonably be expected to have a
Material Adverse Effect on Buyer, or as would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect

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on the ability of Buyer to consummate the transactions contemplated by this Agreement or the
Ancillary Documents to which it is a party.

     Section 5.4 Litigation. There are no suits, actions, arbitrations, proceedings or
investigations pending or, to the Knowledge of Buyer, threatened against Buyer.

     Section 5.5 Outstanding Share Capital. As of the date hereof, Buyer has 655,000,000 FM
Ordinary Shares issued and outstanding. As of the First Closing Date, immediately prior to the
payment of the Initial Cash Consideration, Buyer shall have no more than 680,000,000 FM Ordinary
Shares issued and outstanding on a fully diluted and converted basis, excluding (i) any issuance of
stock options pursuant to the employee stock option plans disclosed in the Buyer SEC Documents and
(ii) any FM Ordinary Shares to be issued upon the vesting of any options issued by Buyer.

     Section 5.6 Validity of Share Consideration. The FM Ordinary Shares issuable as the
Second Installment Share Consideration, the Third Installment Share Consideration and the
Additional Share Consideration will be duly authorized for issuance prior to the First Closing and,
when issued and delivered in accordance with the provisions of this Agreement, will be validly
issued and fully paid and nonassessable and free from any Encumbrance; and the issuance of such FM
Ordinary Shares will not be subject to preemptive or other similar rights and such delivery will
convey to the Selling Shareholders and the Option Holders good and valid title to such FM Ordinary
Shares, free and clear of any and all Encumbrances (other than in connection with applicable
securities laws).

     Section 5.7 SEC Filings.

          (a) Other than its 2006 annual report on Form 20-F, Buyer has timely filed or furnished all
documents required to be filed or furnished by it with the U.S. Securities and Exchange Commission
(the “SEC”) since January 1, 2005 (the “Buyer SEC Documents”). As of their respective dates, the
Buyer SEC Documents complied in all material respects with the requirements of the Securities Act
or the Exchange Act, as the case may be, and the rules and regulations thereunder, and none of the
Buyer SEC Documents contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. The consolidated financial
statements of Buyer included in the Buyer SEC Documents (a) have been prepared from the books and
records of Buyer and its subsidiaries, (b) complied as to form in all material respects with the
applicable accounting requirements and the published rules and regulations of the SEC with respect
thereto, have been, and will be, prepared in accordance with U.S. GAAP consistently applied
throughout the periods involved (except as may be indicated therein or in the notes thereto) and
(c) present fairly in all material respects the consolidated financial position, results of
operations and cash flows of Buyer and its consolidated subsidiaries as of the dates or for the
periods indicated therein, subject, in the case of the unaudited financial statements, to normal
year-end audit adjustments (which are not, in the aggregate, material to Buyer) and the absence of
footnote disclosure.

          (b) Except as and to the extent set forth on Buyer’s consolidated balance sheet as of December
31, 2006, including the notes thereto, and as disclosed in the Buyer SEC Documents, none of Buyer
or any of its consolidated subsidiaries has any liabilities or obligations that are required to be
disclosed pursuant to U.S. GAAP, except for liabilities or

37

 

obligations incurred since December 31, 2006 that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Buyer.

     Section 5.8 Absence of Certain Changes. Since September 30, 2007, there has not been
any stock split or similar change to the capital structure of Buyer or any declaration, setting
aside or payment of any dividend or other distribution in respect of any shares of capital stock of
Buyer (other than the grant of stock options to directors and employees pursuant to employee
benefit plans disclosed in the Buyer SEC Documents), any material amendment to any organizational
document of Buyer or any agreement or commitment by Buyer to do any of the foregoing.

     Section 5.9 No Consent for Creation of Registration Rights. The execution, delivery
and performance by the Buyer of the Registration Rights Agreement (defined in Section 7.5) does not
and will not violate, conflict with or result in a breach of, any contract or other agreement to
which the Buyer is bound. No consent by any party is required for the execution, delivery and
performance by the Buyer of the Registration Rights Agreement.

     Section 5.10 No Other Representations or Warranties. Except for the representations
and warranties contained in this Article V, Buyer makes no other express or implied representation
or warranty to the Seller Parties and the Other Selling Shareholders.

ARTICLE VI.

COVENANTS AND AGREEMENTS

     Section 6.1 Conduct of Business Prior to the First Closing.

          (a) Without the consent of Buyer, from and after the date of this Agreement and until the
First Closing Date, the Company shall, and shall cause the Group Companies to (i) conduct the
Business in the ordinary course of business consistent with commercially reasonable practice, (ii)
not enter into a new line of business and (iii) use their commercially reasonable efforts to
maintain their current relationships with suppliers, customers and others having material business
relationships with them. Except as contemplated by this Agreement, the Company shall not, and shall
cause the Group Companies to not do any of the following from and after the date of this Agreement
and until the First Closing Date without the prior written consent of Buyer:

          (i) except for purchases and sales by a Group Company to or from another Group Company,
purchase, sell or issue (other than the issuance of capital stock upon the exercise of
options outstanding as of the date of this Agreement pursuant to the Option Plans or
pursuant to the Medley Warrants) any of their capital stock or other equity interests or
grant or make any option, subscription, warrant, call, commitment or agreement of any
character in respect of their capital stock or other equity interests;

          (ii) issue or pay any dividends other than to any of the Group Companies, except for
Permitted Dividends;

          (iii) conduct any split, recombination or reclassification or issuance of capital
stock;

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          (iv) take any steps in furtherance of an initial public offering of the Company’s
equity securities on any securities exchange;

          (v) other than in the ordinary course of business consistent with past practice, sell
or otherwise dispose of assets with value in the aggregate in excess of RMB500,000;

          (vi) acquire assets having an aggregate value exceeding RMB2,000,000, excluding (A)
capital expenditures permitted by clause (viii) below, (B) acquisitions in the ordinary
course of business and (C) the Company’s planned fit-out of its offices with new fixtures,
fittings and IT equipment;

          (vii) merge or consolidate with any Person;

          (viii) and other than in the ordinary course of business, make capital expenditures in
excess of RMB2,000,000 in aggregate;

          (ix) incur, assume or guarantee any indebtedness for borrowed money in excess of
RMB1,000,000, other than in each case in the ordinary course of business and other than in
connection with the payment of fees and expenses of financial advisors, legal advisors,
accountants and other service providers incurred in connection with the Company’s proposed
initial public offering, other financing activities or acquisitions (which amounts shall be
paid prior to the First Closing Date), other than as a result of holding the Deposit on
behalf of the Selling Shareholders and the Option Holders and other than in connection with
any Permitted Dividends;

          (x) incur any Encumbrance of material assets, other than Permitted Encumbrances;

          (xi) increase the compensation of employees of the Group Companies other than (A) in
the ordinary course of business of (B) as required by any agreement in effect as of the date
hereof or as required by Law;

          (xii) make any material change in the accounting methods or practices followed by any
of the Group Companies (other than with respect to provisioning for doubtful accounts and
such changes as are required by Law or U.S. GAAP);

          (xiii) other than as required pursuant to PRC Law or as suggested by the Company’s
auditors, change any method of Tax accounting, make or change any Tax election, file any
amended Tax Return, settle or compromise any material Tax liability, agree to an extension
or waiver of the statute of limitations with respect to the assessment or determination of
Taxes, enter into any closing agreement with respect to any Tax or surrender any right to
claim a Tax refund;

          (xiv) other than in the ordinary course of business, enter into any contract that would
be a Material Contract;

          (xv) enter into any partnership, limited liability company or joint venture agreement
other than in the ordinary course of business;

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          (xvi) other than in the ordinary course of business, terminate or make any material
amendment to a Material Contract, except a Material Contract entered into with Medley;

          (xvii) grant any waiver or release under any confidentiality or similar agreement;

          (xviii) other than (A) in the ordinary course of business, (B) as required by any
agreement in effect as of the date hereof, (C) as required by Law enter into, adopt or amend
any employment agreement or employee benefit plan with or for the benefit of any of its
employees;

          (xix) purchase, cancel or terminate any insurance policy naming any of the Group
Companies as a beneficiary or a loss payee other than in the ordinary course of business;

          (xx) amend any of its organizational documents; or

          (xxi) agree or commit to do any of the foregoing.

     Section 6.2 Filings and Consents. Each of the Seller Parties and the Group Companies,
on the one hand, and Buyer, on the other hand, shall use all reasonable best efforts to do all
things necessary, proper and desirable to obtain and to cooperate in obtaining any consent,
approval, authorization or order of, and in making any registration or filing with, any
Governmental Authority or other Person required in connection with the execution, delivery or
performance of this Agreement, including any applicable filings pursuant to (i) any antitrust
regulation, (ii) the Securities Act and Exchange Act, and (iii) any other applicable filings or
consents. The Seller Parties and Buyer shall pay all filing fees required to be paid in connection
with their respective filings to be made under each such foreign law or regulation.

     Section 6.3 Third Party Consents. Except as set forth on Section 6.3 to the Disclosure
Schedule, the Company shall use commercially reasonable best efforts to obtain all consents of any
parties to any Material Contract as are required thereunder in connection with the transactions
contemplated by this Agreement and the Ancillary Documents or for any such Material Contracts to
remain in full force and effect immediately following the First Closing, all of which are set forth
on Schedule 6.3. In the event that the other parties to any such Material Contract conditions its
grant of a consent, waiver or approval (including by threatening to exercise a “recapture” or other
termination right) upon the payment of a consent fee, “profit sharing” payment or other
consideration, including increased rent payments or other payments under the Material Contract, the
Company shall be responsible for making all payments required to obtain such consent, waiver or
approval.

     Section 6.4 Tax Matters; Cooperation; Preparation of Returns; Tax Elections.

          (a) Buyer agrees to (i) consult with the Seller Parties as is reasonably necessary for the
filing of all Tax Returns and the making of any election related to Taxes for the periods prior to
the First Closing and (ii) furnish or cause to be furnished to the Seller Parties, upon request, as
promptly as practicable, such information and assistance relating to any of the Group Companies
(including access to books and records, employees, contractors and representatives) as is
reasonably necessary for the periods prior to the First Closing for

40

 

the preparation for any audit by any Taxing Authority, and the prosecution or defense of any
claim, suit or proceeding relating to any Tax Return for the periods prior to the First Closing.
The Company shall retain all books and records with respect to Taxes pertaining to the Group
Companies until the expiration of all relevant statutes of limitations (and, to the extent notified
by Buyer, any extensions thereof). At the end of such period, Buyer shall provide the Seller
Parties with at least sixty (60) days prior written notice before destroying any such books and
records, during which period the party receiving such notice can elect to take possession, at its
own expense, of such books and records.

          (b) The Company shall prepare, or cause to be prepared, all Tax Returns in respect of any of
the Group Companies for any taxable year ending on or before the First Closing Date. The Company
shall, or shall cause the Group Companies to, timely pay to the relevant Taxing Authority all Taxes
due in connection with any such Tax Returns.

          (c) The Seller Parties, shall, or shall cause relevant equity holders of the Group Companies
to, pay all transfer, documentary, sales, use, registration and other such Taxes (including all
applicable real estate transfer Taxes, but excluding any Taxes based on or attributable to income
or gains) and related fees (including any penalties, interest and additions to Tax) incurred in
connection with the transfer of the Offered Shares by the Selling Shareholders to Buyer and the
transfer of all equity interests in the Group Companies held by their equity holders to Buyer (or
Persons designated by Buyer) pursuant to the terms of this Agreement and the Ancillary Documents
and the transactions contemplated hereby and thereby.

     Section 6.5 Employees; Benefit Plans. Nothing herein expressed or implied shall confer
upon any of the employees of the Seller Parties, Buyer, the Group Companies, or any of their
Affiliates, any additional rights or remedies, including any additional right to employment, or
continued employment for any specified period, of any nature or kind whatsoever under or by reason
of this Agreement and the Ancillary Documents.

     Section 6.6 Related Party Accounts. Prior to the First Closing Date, the Company and
the Seller Parties shall use reasonable efforts to cash settle or extinguish all Related Party
Accounts, so that there will be no Related Party Accounts outstanding upon the First Closing. The
Company and the Seller Parties shall provide to Buyer, at least 5 days prior to the First Closing
Date, a schedule listing all remaining Related Party Accounts As used herein, “Related Party
Accounts” means with respect to each Group Company (i) all related party receivables due to such
Group Company from the Seller Parties and their Affiliates (other than the Group Companies), other
than receivables for goods and services incurred in the ordinary course of business less (ii) all
related party payables of such Group Company to the Seller Parties and their Affiliates (other than
the Group Companies), other than payables for goods and services incurred in the ordinary course of
business.

     Section 6.7 Non-Violation.

          (a) Prior to the First Closing Date, the Seller Parties shall not, and shall cause any Group
Company not to, without the prior written consent of Buyer, knowingly take any action which would
result in any of the representations, warranties or covenants contained in this Agreement and in
the Ancillary Documents becoming untrue or incapable of performance, as applicable. The Seller
Parties shall promptly advise Buyer of any action or event of which the Seller Parties become aware
which has the effect of rendering any such covenants incapable of performance.

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          (b) Prior to the First Closing Date, Buyer shall not, without the prior written consent of the
Company, knowingly take any action which would result in any of the representations, warranties or
covenants contained in this Agreement and in the Ancillary Documents becoming untrue or incapable
of performance, as applicable. Buyer shall promptly advise the Sellers’ Representative of any
action or event of which Buyer becomes aware which has the effect of rendering any such
representations and warranties untrue or any such covenants incapable of performance.

     Section 6.8 Confidentiality. Each party hereto shall keep confidential, and shall
cause its officers, directors, employees, counsel, investment bankers, consultants and other
representatives to keep confidential, the terms and conditions of this Agreement and of any
Ancillary Document (collectively, the “Confidential Information”), and shall use, and shall cause
its officers, directors, employees, counsel, investment bankers, consultants and other
representatives to use, the Confidential Information, except as the parties hereto mutually agree
in writing otherwise, only in connection with the evaluation of the transactions contemplated by
this Agreement and the Ancillary Documents provided that any party may disclose Confidential
Information (i) to its officers, directors, employees, counsel, investment bankers, consultants and
other representatives who need to know such information for the purpose of the performance of its
obligations in connection herewith and with the Ancillary Documents (it being understood that such
party will cause each Person to whom it has disclosed such Confidential Information to treat such
information in a confidential manner), (ii) in the event that such party or its officers,
directors, employees, counsel, investment bankers, consultants and other representatives or
affiliates are required to disclose such information in connection with any judicial or
administrative proceeding subject to such party provide each other party hereto in advance of such
disclosure notice of such requirements, (iii) to the extent advised by competent legal advisors
that such disclosure is required by applicable Law and so long as, where such disclosure is to a
Governmental Authority, such party shall use all reasonable efforts to obtain confidential
treatment of the Confidential Information so disclosed, (iv) to the extent required by the rules of
the SEC and any stock exchange and (v) to permit disclosure to its respective fund investors of the
amount of proceeds it receives hereunder (including the number of FM Ordinary Shares).

     Section 6.9 Buyer’s Board of Directors. As of the First Closing Date Mr. Yising Chan
shall have the right to appoint one observer (which may be himself) to Buyer’s board of directors,
provided that such appointee shall have no voting rights with respect to matters subject to board
approval, and provided further that such observer appointed by Mr. Yising Chan may be removed as an
observer upon the Third Closing.

     Section 6.10 Buyer’s Deposit; Bank Guarantee Letter. Buyer shall pay the Deposit by
wire transfer to an account specified by the Company (the “Deposit Account”), on the date of the
execution of this Agreement, or if such date is not a Business Day, on the first Business Day
following the date of the execution of this Agreement. Simultaneously with the First Closing (and
following the satisfaction or waiver of the conditions set forth in Article VII and Article VIII),
the Company shall transfer the Deposit to the Selling Shareholders and the Option Holders
Representative in accordance with the First Closing Allocation Schedule. The Company agrees that
the Deposit shall remain in the Deposit Account and shall not otherwise be used or withdrawn from
such account except as provided in Section 11.1. Buyer shall deliver the Bank Guarantee Letter to
the Company on the date of the execution of this Agreement.

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     Section 6.11 No Transfer by Selling Shareholders. From the date of this Agreement
through the First Closing Date, no Selling Shareholder shall transfer or grant or permit or allow
the creation of and Encumbrance, directly or indirectly, any interest in the Company or the entity
through which it holds its interest in the Company without the prior written approval of Buyer;
provided that (i) any Selling Shareholder who is a natural person may transfer to his or her
guardian, conservator, executor, administrator, spouse, children, grandchildren or parents, or to a
trust of which the beneficiaries of the corpus and the income shall by such a person upon such
Selling Shareholder’s death or permanent incapacity, (ii) any Selling Shareholder that is not a
natural person may transfer to its limited partners, its Affiliates (including any person to whom
such Affiliate would be allowed to transfer such Affiliate’s shares pursuant to this Section 6.11),
or to any successor to such Selling Shareholder as the result of any merger, consolidation or other
reorganization; provided further that any transferee in relation to any transfer pursuant to any of
the foregoing exceptions shall enter into an agreement or instrument prior to the transfer thereof
and prior to the First Closing Date pursuant to which such transferee shall agree to be bound by
the terms and conditions of this Agreement and the Ancillary Documents to which the transferor is a
party.

     Section 6.12 Change of Owners; CGEN Network Transfer. The Company shall use reasonable
best efforts to cause all holders of outstanding equity interests in CGEN Network to transfer at
the First Closing, or as soon as possible thereafter, their respective equity interests in such
entity to Buyer or a Person or Persons designated by Buyer, provided that any such transfer shall
not affect CGEN Network’s status as a “variable interest entity” of the Company pursuant to U.S.
GAAP.

     Section 6.13 Key Management Independence.

          (a) Buyer agrees that it shall, during the period commencing from the First Closing Date and
ending on the date of payment of the Third Installment Consideration and the Additional Share
Consideration, take all actions necessary and appropriate to enable the Key Management (meaning Mr.
Yising Chan, Mr. Guanyong Tian and Mr. Mei Lijun) to continue to run the Group Companies as an
independent business unit of Buyer, provided that the Key Management’s ability to operate the Group
Companies as an independent business unit shall be subject to (i) compliance with Buyer’s code of
ethics and (ii) any relevant requirements of the Sarbanes-Oxley Act and other U.S. securities laws
and regulations.

          (b) Subject to Section 2.2(b)(ii), Buyer agrees that it shall not, prior to the Third Closing
Date, dismiss any member of the Key Management without Cause and that any such dismissal without
Cause will accelerate the Second Closing and/or the Third Closing as set forth in Article II.

          (c) Buyer agrees that it shall, until the Third Closing Date, provide reasonable capital
support within thirty (30) days after a written request (which request shall identify in reasonable
detail the proposed use of the funds) by the Company (during the period beginning January 1, 2008
and ending December 31, 2009, the outstanding principal amount of such capital support shall not at
any time exceed US$20,000,000, excluding any amounts due pursuant to the Loan Repayment Loan), and
other support to the Group Companies. Any capital support pursuant to this Section 6.13(c) may, at
the option of Buyer, be in the form of borrowings and the interest rate with respect thereto shall
be on an arm’s length basis. Buyer shall consider in good faith any reasonable request from the
Company for capital support in excess of such US$20,000,000.

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          (d) Without limiting the foregoing, Buyer agrees that it shall not, prior to the Third Closing
Date, allocate unreasonable overhead expenses to any of the Group Companies.

          (e) Subject to Section 2.2(b)(ii), Buyer agrees that Key Management will have sole and full
authority with respect to all aspects of the Company’s operations prior to the Third Closing Date,
including the appointment and dismissal of all other Company personnel; provided, however, the
Company agrees Buyer shall be entitled to appoint a financial controller for the Company on or
following the First Closing Date and Company and Buyer agree that following the First Closing Date
the Company shall adopt and implement the accounting policies set forth in Schedule 6.13(e).

     Section 6.14 Non-competition.

          (a) Each member of Key Management agrees that he shall not, from the First Closing Date until the
date that is two (2) years after the date on which such member of Key Management ceases to be
employed by or otherwise be a service provider to the Company, Buyer or their respective
Affiliates, engage in a Competing Business, directly or indirectly, in the PRC or directly or
indirectly enter into a Contract or be an employee, consultant, director, advisor, investor or
otherwise be affiliated with any company or entity directly or indirectly entering into any
Contract with the Carrefour Commercial Companies or any Affiliates thereof for the provision of
goods and services similar to those provided in the Amended and Restated Video Information System
Cooperation Contract between Carrefour Commercial Companies and Shanghai CGEN Digital Media Network
Company Limited (it being understood that the foregoing restriction shall not be applicable if such
member of Key Management is terminated without Cause or upon the occurrence of a Prospective Event
of Change in Control).

          (b) Buyer and the Company each agree that during the period from the First Closing until the
Third Closing Date they shall not, and shall cause their subsidiaries not to, knowingly compete
indirectly or directly for any retailers known by such party to be under contract with the other
party. Buyer and the Company further agree, that in the event the Carrefour Contract is
terminated, Buyer shall have the unrestricted right to compete for any new contract with the
Carrefour Commercial Companies to provide similar services as provided in the Carrefour Contract
and, if it is awarded such contract, shall use reasonable efforts to transfer such contract to the
Company, provided that such transfer is approved by the Carrefour Commercial Companies.

          (c) Without limiting clause (b) of this Section 6.14, Buyer and the Company further agree
that, during the period from the First Closing Date until the Third Closing Date, to the extent
they are competing with one another, they shall do so in good faith.

     Section 6.15 Further Actions. Each of the parties hereto shall use commercially
reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done
all things necessary under applicable Law, and execute and deliver such documents and other papers,
as may be required to consummate the transactions contemplated by this Agreement and by the
Ancillary Documents.

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     Section 6.16 Delivery of Allocation Schedule. The Seller Parties shall cause the First
Closing Allocation Schedule to be delivered to Buyer no later than five (5) Business Days prior to
the First Closing Date.

     Section 6.17 Grant of Buyer Options. Buyer agrees to grant a specified number of
options to purchase FM Ordinary Shares (the “Buyer Options”) subject to applicable law, no later
than 18 months following the First Closing Date to (i) the employees of the Company who have
entered into the Key Company Employee Employment Agreements (defined in Section 7.10) on or prior
to the First Closing Date and (ii) to such other employees of the Company as shall be mutually
agreed between Buyer and the Company. The Company may determine, in its sole discretion, to
allocate the number of the Buyer Options among the employees described in clauses (i) and (ii)
above. Buyer shall grant additional Buyer Options to such parties in the event the 2009 Audited
Annual Net Income is equal to or greater than US$28,000,000.

     Section 
6.18 Delivery of Audited September 30, 2007 Financial Statements; 2007 Audited
Financial Statements, Closing Net Current Assets.

          (a) The Company shall deliver to Buyer the Unaudited Financial Statements on or prior to the
date of this Agreement, (b) the Company shall deliver to Buyer the Audited September 30, 2007
Financial Statements no later than two (2) business days prior to the First Closing Date, which
financial statements the Company does not reasonably expect to be materially different in substance
from the Unaudited Financial Statements, and (c) the Company shall deliver the 2007 Audited
Financial Statements to Buyer as soon as practicable after December 31, 2007, and in no event later
than April 30, 2008. To the extent that Closing Net Current Assets as reflected on the 2007
Audited Financial Statements, minus the amount of any Permitted Dividends paid prior to June 30,
2008, is less than zero, Buyer shall be entitled to reduce the Second Installment Consideration on
a dollar-for-dollar basis by the amount of such deficit, plus interest on such amount from the
First Closing Date through the date of payment of the Second Installment Consideration (based on
the average three-month Hong Kong Interbank Offered Rate quoted by the Hong Kong and Shanghai
Banking Corporation during such period).

     Section 6.19 Payment of Permitted Dividends; Other Distributions. The parties agree
and acknowledge that, notwithstanding anything to the contrary in this Agreement, the Company may,
subject to applicable law, at any time prior to the First Closing Date declare one or more
Permitted Dividends payable to shareholders of record as of a date prior to the First Closing Date
which shall be payable by the Company at any time prior to the First Closing Date (or, to the
extent applicable, June 30, 2008). In addition, to the extent any provisions, reserves or other
allowances made by the Company during the 2007 fiscal year are subsequently reversed and added back
to net income during the 2008 or the 2009 fiscal year, the Company and Buyer agree that such
amounts shall be distributed to the Selling Shareholders and the Option Holders as additional cash
consideration (x) in accordance with the Second Installment Allocation Schedule and concurrently
with the due date for payment of the Second Installment Consideration (if any), with respect to any
such provisions, reserves or allowances that are reversed during the 2008 fiscal year and (y) in
accordance with the Third Installment Allocation Schedule and concurrently with the due date for
payment of the Third Installment Consideration (if any), with respect to any such provisions,
reserves or allowances that are reversed during the 2009 fiscal year.

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     Section 6.20 Cancellation of Company Stock Options. At least 15 days prior to the
First Closing Date, the Company shall send to each Option Holder written notice advising such
Option Holder that, subject to, and contemporaneously with the effectiveness of, the First Closing
(i) each in-the-money stock option held by such Option Holder shall be cancelled in exchange for
the consideration provided for in Article II of this Agreement, and (ii) each out-of-the-money
stock option held by such Option Holder shall be cancelled.

     Section 6.21 Medley Repayment. The parties agree that, no later than seven (7) days
after the date of this Agreement, the Buyer shall provide a no-interest loan of US$30,000,000,
pursuant to an agreement substantially in the form attached hereto as Exhibit I (the “Loan
Repayment Loan”) to the Company for the sole purpose of repaying, prior to the First Closing, any
and all amounts owing pursuant to the Medley Credit Agreement; it being understood and agreed that
the full amount of the Loan Repayment Loan shall be repaid to Buyer no later than the earlier of
(i) thirty (30) days after the First Closing and (ii) January 30, 2008. In connection with the
repayment to Medley, (i) the Company shall obtain a payoff statement from Medley, substantially in
the form attached hereto as Exhibit G (the “Medley Payoff Statement”) and (ii) Medley shall have
exercised or cancelled the Medley Warrants.

     Section 6.22 Use of CGEN’s Media-1 Software. The parties agree that if the Company
provides its “Media-1” software, together with any related technical services, to Buyer and its
Affiliates following the First Closing, the Company shall be able to charge a reasonable fee with
respect to the provision of such software and services, at rates to be mutually agreed between
Buyer and the Company.

ARTICLE VII.

CONDITIONS TO THE OBLIGATIONS OF THE SELLER PARTIES AND THE

OTHER SELLING SHAREHOLDERS

     The obligation of the Seller Parties and the Other Selling Shareholders to effect the First
Closing under this Agreement as specified below is subject to the satisfaction, at or prior to the
First Closing Date, of each of the following conditions, unless validly waived in writing by the
Company and the Sellers’ Representative.

     Section 7.1 Representations and Warranties. The representations and warranties made by
Buyer in this Agreement, disregarding all qualifications and exceptions as to materiality and
Material Adverse Effect on Buyer, shall be true and correct as of the First Closing Date as though
such representations and warranties were made at such date (except that any representations and
warranties that are made as of a specified date shall be true and correct as of such specified
date), with only such exceptions as would not in the aggregate reasonably be expected to have a
Material Adverse Effect on Buyer.

     Section 7.2 Performance. Buyer shall have performed and complied in all material
respects with all agreements and obligations required by this Agreement and the Ancillary Documents
to be so performed or complied with by it prior to the First Closing Date.

     Section 7.3 Qualifications. The consents, waivers, approvals or other authorizations
listed on Schedule 7.3 shall have been obtained or otherwise satisfied and shall continue to be in
effect.

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     Section 7.4 No Material Adverse Change. Since June 30, 2007 there shall not have been
any Material Adverse Change in respect of Buyer that is continuing as of the Closing Date.

     Section 7.5 Registration Rights Agreement. As of the First Closing, Buyer shall have
entered into a registration rights agreement with the Selling Shareholders and the Option Holders,
substantially in the form attached hereto as Exhibit B (the “Registration Rights Agreement”) and
such Registration Rights Agreement shall be in full force and effect.

     Section 7.6 Officer’s Certificate. Buyer shall have delivered to the Selling
Shareholders a certificate, dated as of the First Closing Date and executed by an executive officer
of Buyer, certifying to the fulfillment of the conditions specified in Section 7.1, Section 7.2,
Section 7.3 and Section 7.4 hereof.

     Section 7.7 Injunctions. At the First Closing Date, there shall not be in effect any
Law or Governmental Order directing that the transactions provided for herein and in the Ancillary
Documents not be consummated as provided herein or which has the effect of rendering it impossible
to consummate such transactions.

     Section 7.8 Adverse Market Change. After the date hereof and prior to the First
Closing Date, there shall not have occurred a suspension or material limitation in trading in
Buyer’s securities on NASDAQ which occurrence is still outstanding as of the First Closing Date, if
the effect of any such event in the reasonable judgment of the Company makes it impracticable or
inadvisable to proceed with the transactions contemplated in this Agreement and the Ancillary
Documents.

     Section 7.9 Opinion of Counsel. As of the First Closing Date, the Seller Parties, the
Option Holders and the Other Selling Shareholders shall have received from Cayman Islands counsel
to Buyer a written opinion dated and delivered as of the First Closing Date substantially in the
form attached hereto as Exhibit C.

     Section 7.10 Employment Agreements. As of the First Closing Date, each Key Company
Employee shall have entered into a Key Company Employee Employment Agreement, substantially in the
form attached hereto as Exhibit D (each a “Key Company Employee Employment Agreement”), and each
such agreement shall be in full force and effect.

ARTICLE VIII.

CONDITIONS TO BUYER’S OBLIGATIONS

     The obligation of Buyer to effect the First Closing under this Agreement as specified below is
subject to the satisfaction, at or prior to the First Closing Date, as applicable, of each of the
following conditions, unless waived in writing by Buyer.

     Section 8.1 Representations and Warranties. The representations and warranties made by
the Seller Parties and the Other Selling Shareholders in this Agreement, disregarding all
qualifications and exceptions as to materiality and Material Adverse Effect, shall be true and
correct as of the First Closing Date as though such representations and warranties were made at
such date (except that any representations and warranties that are made as of a specified date
shall be true and correct as of such specified date), with only such exceptions

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as would not in the aggregate reasonably be expected to have a Material Adverse Effect on the
Company or the Selling Shareholders.

     Section 8.2 Closing Net Current Assets. Closing Net Current Assets minus the
aggregate principal amount of the loan outstanding under the Medley Credit Agreement as of the
First Closing Date shall be greater than zero.

     Section 8.3 Performance.

          (a) Performance. The Company and the Selling Shareholders shall have performed and complied in
all material respects with all agreements and obligations required by this Agreement and the
Ancillary Documents to be performed or complied with by them prior to the First Closing Date.

          (b) Proceedings and Documents. All corporate and other proceedings that are required to be
performed in connection with the transactions contemplated by this Agreement and the Ancillary
Documents at the First Closing shall have been performed. Buyer shall have received a copy of (i)
the Company’s board resolutions approving the transactions contemplated hereunder, (ii) the board
resolutions of CGEN Media Technology Company Limited (Hong Kong) approving the transactions
contemplated hereunder (insofar as such transactions pertain to CGEN Media Technology Company
Limited (Hong Kong)) and (iii) the waiver by the holders of the Company Preferred Shares of their
rights pursuant to the Company’s Shareholders Agreement dated December 7, 2006 in connection with
the transactions contemplated hereunder

          (c) Qualifications. The consents, waivers, approvals or other authorizations listed on
Schedule 8.3(c) shall have been obtained or otherwise satisfied and shall continue to be in effect.

          (d) No Material Adverse Change. Since the Balance Sheet Date there shall not have been any
Material Adverse Change in respect of the Group Companies that is continuing as of the Closing
Date.

     Section 8.4 No Indebtedness. The Seller Parties will have taken such action, or have
caused the Group Companies to have taken such action, such that none of the Group Companies has any
outstanding indebtedness for borrowed money, other than in connection with the Loan Repayment Loan
and any liabilities incurred in the ordinary course of business of the Group Companies consistent
with past practice.

     Section 8.5 Officer’s Certificate. The Company shall have delivered to Buyer a
certificate, dated as of the First Closing Date and executed by the Chief Executive Officer or the
Chief Financial Officer, certifying to the fulfillment of the conditions specified in Section 8.1,
Section 8.3(a), Section 8.3(c), Section 8.3(d) and Section 8.4 hereof to the extent such conditions
relate to the Company.

     Section 8.6 Outstanding Obligations. As of the First Closing Date, the Company shall
have provided to Buyer an updated schedule of Outstanding Obligations setting forth the Company’s
operating lease obligations as of December 31, 2007.

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     Section 8.7 Employment Agreements. As of the First Closing Date, each Key Company
Employee shall have entered into a Key Company Employee Employment Agreement and each such
agreement shall be in full force and effect.

     Section 8.8 Corporate Matters. On or prior to the First Closing Date, the Company
shall have provided to Buyer copies of (i) the notices delivered to the Option Holders as required
in Section 6.20 (which notices shall be substantially in the form attached hereto as Exhibit H),
and (ii) the acceptance, by each Option Holder that agrees to the cancellation of his or her
Company Options pursuant to the terms of this Agreement, of the cancellation of such Option
Holder’s Company Options, contemporaneously with the First Closing, in exchange for the
consideration set forth in Article II.

     Section 8.9 Opinions of Counsel. Buyer shall have received from Cayman Islands counsel
and PRC counsel to the Company, the Group Companies and the Selling Shareholders, as the case may
be, written opinions dated and delivered as of the First Closing Date, substantially in the forms
attached hereto as Exhibits E and F, respectively.

     Section 8.10 CGEN Network Transfer. The Seller Parties shall have submitted an
application to the appropriate PRC Government Authorities with respect to the CGEN Network Transfer
on or prior to the First Closing Date and provided a copy of such application to Buyer.

     Section 8.11 Injunctions. At the First Closing Date, there shall not be in effect any
Law or Governmental Order directing that the transactions provided for herein not be consummated as
provided herein or which has the effect of rendering it impossible to consummate such transactions.

     Section 8.12 Financial Statements. The Seller Parties or the Company shall have
delivered the Audited September 30, 2007 Financial Statements to Buyer on or prior to the First
Closing Date, and the audit opinion for such Audited September 30, 2007 Financial Statements shall
be based on representations from existing Company management, including the Management Parties,
consistent with past practice.

     Section 8.13 Medley Payoff Statement. In connection with the Loan Repayment Loan, the
Company shall have obtained the Medley Payoff Statement.

ARTICLE IX.

TERMINATION

     Section 9.1 Termination. This Agreement may be terminated at any time prior to the
First Closing Date:

          (a) by the mutual written consent of the Company and the Sellers’ Representative on the one
hand and Buyer, on the other;

          (b) by either the Company and the Sellers’ Representative, on the one hand or Buyer, on the
other, if any Governmental Authority of competent jurisdiction shall have issued an order, decree
or ruling or taken any other action restraining, enjoining or otherwise prohibiting the
transactions contemplated hereby and such order, decree or ruling or other action shall have become
final and nonappealable;

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          (c) by Buyer, if any Seller Party breaches or fails to perform in any respect any of its
representations, warranties or covenants contained in this Agreement or any Ancillary Document and
such breach or failure to perform (A) would give rise to the failure of a condition set forth in
Section 8.1 or Section 8.3 of Article VIII, (B) cannot be or has not been cured within 30 days
following written notice of such breach or failure to perform and (C) has not been waived by Buyer;

          (d) by the Company and the Sellers’ Representative, if Buyer breaches or fails to perform in
any respect any of its representations, warranties or covenants contained in this Agreement or any
Ancillary Document and such breach or failure to perform (A) would give rise to the failure of a
condition set forth in Section 7.1, Section 7.2, Section 7.3 or Section 7.4 of Article VII, (B)
cannot be or has not been cured within 30 days following written notice of such breach or failure
to perform and (C) has not been waived by the Company and the Sellers’ Representative; or

          (e) by either the Company and the Sellers’ Representative, on the one hand or Buyer, on the
other, if the First Closing Date shall not have occurred (other than through the failure of any
party seeking to terminate this Agreement to comply fully with its obligations under this
Agreement) on or before March 31, 2008 (the “Long-Stop Date”), provided that Buyer may not
terminate this Agreement pursuant to this Section 9.1(e) if it has willfully and intentionally
taken action to cause any of the conditions set forth in Article VIII to not be satisfied as of the
Long-Stop Date;

          (f) by Buyer, upon the Selling Shareholders’ failure to effect the purchase and sale as
provided herein; provided that each of the conditions set forth in Article VII have been satisfied
or waived by the Company and the Sellers’ Representative (other than those that are only capable of
being satisfied on or as of the First Closing Date); or

          (g) by the Company and the Sellers’ Representative, upon Buyer’s failure to effect the
purchase and sale as provided herein; provided that each of the conditions set forth in Article
VIII have been satisfied by the Company and Seller Parties, as applicable or waived by Buyer (other
than those that are only capable of being satisfied on or as of the First Closing Date), except for
any such condition where Buyer has willfully and intentionally taken action to cause such condition
to not be satisfied; provided that Buyer shall not be obligated to waive any condition set forth in
Article VIII.

     Section 9.2 Procedure and Effect of Termination. In the event of the termination of
this Agreement and the abandonment of the transactions contemplated hereby pursuant to Section 9.1
hereof, written notice thereof shall forthwith be given to all other parties. If this Agreement is
terminated and the transactions contemplated by this Agreement are abandoned as provided herein:

          (a) Buyer will redeliver or at its option destroy (and deliver a certificate from Buyer’s
General Counsel to such effect) to the Company all documents, work papers and other material of any
of the Seller Parties relating to the transactions contemplated hereby, whether so obtained before
or after the execution hereof (provided that the General Counsel of the Buyer may keep a copy of
all such materials for evidentiary purposes only);

          (b) The provisions of the Confidentiality Agreement shall continue in full force and effect;
and

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          (c) Subject to Section 11.1, no party to this Agreement will have any liability under this
Agreement to any other except (i) that nothing herein shall relieve any party from any liability
for any willful breach of any of the representations, warranties, covenants and agreements set
forth in this Agreement, and (ii) as contemplated by paragraph (b) above.

ARTICLE X.

INDEMNIFICATION

     Section 10.1 Indemnification by the Management Parties.

          (a) Subject to the limits set forth in this Article X, from and after the First Closing Date,
to the extent permitted by law, the Management Shareholder, jointly and severally, and the Other
Management Parties, severally and not jointly with each other and the Management Shareholder (each
an “Indemnifying Management Party”), agree to indemnify, defend and hold Buyer, its Affiliates
(including the Company and its Affiliates) and their respective officers, directors, stockholders,
employees, agents and representatives (the “Buyer Indemnified Persons”) harmless from and in
respect of any and all losses, damages, costs, penalties, assessments, fines and expenses
(including reasonable fees and expenses of counsel and other professional advisers) (collectively,
“Losses”), that they actually incur arising out of or due to (i) any breach of any representation
or warranty by the Seller Parties contained in Article III of this Agreement or (ii) any breach of
any covenant by the Seller Parties contained in this Agreement.

          (b) The representations and warranties contained in Article III of this Agreement shall
survive the First Closing for a period of one (1) year after the First Closing Date; provided that
(i) the representations and warranties set forth in Section 3.1(a), Section 3.2 and Section 3.6(a)
shall survive for a period of eighteen months after the First Closing Date and (ii) the
representations and warranties set forth in Section 3.11 (Tax Matters) shall survive the First
Closing until ninety (90) days after the expiration of the applicable statute of limitations;
provided, further, that any claim made with reasonable specificity by the party seeking to be
indemnified shall survive until such time as such claim is finally and fully resolved so long as
such claim is brought prior to the expiration of the applicable survival period set forth in this
Section 10.1(b). Each covenant or agreement of the Seller Parties in this Agreement shall survive
the First Closing until six months from the time performance of such covenant or agreement is
contemplated; provided that any claim made with reasonable specificity by the party seeking to be
indemnified shall survive until such time as such claim is finally and fully resolved so long as
such claim is brought prior to the expiration of the applicable survival period set forth in this
Section 10.1(b).

          (c) Notwithstanding anything to the contrary contained in this Agreement: (i) with respect to
the provisions of Section 10.1(a)(i), an Indemnifying Management Party shall not be liable for any
claim for indemnification pursuant thereto, unless and until the aggregate amount of indemnifiable
Losses which may be recovered from the Indemnifying Management Parties as a group equals or exceeds
US$1,000,000, after which the Indemnifying Management Party shall be liable only for those Losses
in excess of US$1,000,000, and (ii) the maximum amount of indemnifiable Losses which may be
recovered from any Indemnifying Management Party shall be an amount equal to 100% of the Aggregate
Consideration actually received by such Indemnifying Management Party.

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     Section 10.2
Indemnification by the Selling Shareholders.

          (a) Subject to the limits set forth in this Article X, from and after the First Closing Date,
to the extent permitted by law, each Selling Shareholder (an “Indemnifying Selling Shareholder”)
agrees, severally and not jointly, to indemnify, defend and hold the Buyer Indemnified Persons
harmless from and in respect of any and all Losses that they actually incur arising out of or due
to (i) any breach of any representation or warranty of such Indemnifying Selling Shareholder
contained in Article IV of this Agreement, and (ii) any breach of any covenant by such Indemnifying
Selling Shareholder contained in this Agreement.

          (b) The representations and warranties contained in Article IV of this Agreement shall survive
the First Closing for a period of one (1) year after the First Closing Date; provided that the
representations and warranties set forth in Section 4.2 shall survive for a period of eighteen
months following the First Closing Date; provided, further, that any claim made with reasonable
specificity by the party seeking to be indemnified shall survive until such time as such claim is
finally and fully resolved so long as such claim is brought prior to the expiration of the
applicable survival period set forth in this Section 10.2(b). Each agreement of the Indemnifying
Selling Shareholders in this Agreement shall survive the First Closing until one (1) year from the
time performance of such agreement is contemplated; provided that any claim made with reasonable
specificity by the party seeking to be indemnified shall survive until such time as such claim is
finally and fully resolved so long as such claim is brought prior to the expiration of the
applicable survival period set forth in this Section 10.2(b).

          (c) Notwithstanding anything to the contrary contained in this Agreement: (i) an Indemnifying
Selling Shareholder shall not be liable for any claim for indemnification pursuant to Section
10.2(a)(i), unless and until the aggregate amount of indemnifiable Losses which may be recovered
from the Indemnifying Selling Shareholders equals or exceeds US$1,000,000, after which the
Indemnifying Selling Shareholders shall be liable only for those Losses in excess of US$1,000,000,
and (ii) the maximum amount of indemnifiable Losses which may be recovered from any Indemnifying
Selling Shareholder shall be an amount equal to 100% of the Aggregate Consideration actually
received by such Indemnifying Selling Shareholder.

     Section 10.3 Indemnification by Buyer.

          (a) Subject to the limits set forth in this Article X, from and after the First Closing Date,
to the extent permitted by law, Buyer agrees to indemnify, defend and hold the Selling Shareholders
and the Other Management Parties, their Affiliates and their respective officers, directors,
stockholders, employees, agents and representatives (the “Seller Indemnified Persons”) harmless
from and in respect of any and all Losses that they may incur arising out of or due to any breach
of any representation, warranty, covenant or other agreement of Buyer contained in this Agreement
provided that, with respect to all Losses indemnifiable pursuant to this paragraph (a) arising from
the failure of a representation or warranty herein by Buyer to be true and correct, the Seller
Indemnified Persons shall not be entitled to recover more than the amount of the Aggregate
Consideration.

          (b) The representations and warranties of Buyer contained in this Agreement shall survive the
First Closing for a period of one (1) year after the First Closing; provided that the
representations and warranties set forth in Section 5.1 and Section 5.2 shall

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survive for a period of eighteen months following the First Closing Date and the
representations and warranties set forth in Section 5.6 shall survive until the Third Closing Date;
provided, further, that any claim made with reasonable specificity by the party seeking to be
indemnified shall survive until such time as such claim is finally and fully resolved so long as
such claim is brought prior to the expiration of the applicable survival period set forth in this
Section 10.3(b). Each covenant or agreement of Buyer in this Agreement shall survive the First
Closing until one (1) year from the time performance of such covenant or agreement is contemplated;
provided that any claim made with reasonable specificity by the party seeking to be indemnified
shall survive until such time as such claim is finally and fully resolved so long as such claim is
brought prior to the expiration of the applicable survival period set forth in this Section
10.3(b).

     Section 10.4 Indemnification as Exclusive Remedy; Mitigation. Except with respect to
willful misrepresentation or fraud claims, the indemnification provided in this Article X, subject
to the limitations set forth herein, shall be the exclusive, post-Closing remedy available to any
party in connection with any and all Losses arising out of or resulting from this Agreement, the
transactions contemplated hereby, any property owned, based or subleased by any of the Group
Companies or otherwise regarding any of the Group Companies. Each party hereto shall take all
reasonable steps to mitigate its Losses after becoming aware of any event which could reasonably be
expected to give rise to any Losses. None of the parties hereto shall be liable under any provision
of this Agreement or any Ancillary Document for any consequential or punitive damages (other than
consequential or punitive damages payable to a third party).

     Section 10.5 Limitation on Indemnification. No claim may be asserted against either
party for breach of any representation, warranty, covenant or agreement contained herein, unless
written notice of such claim or action is received by such party describing in reasonable detail
the facts and circumstances with respect to the subject matter of such claim on or prior to the
date on which the representation, warranty, covenant or agreement on which such claim is based
ceases to survive as set forth in Section 10.1, Section 10.2 and Section 10.3 irrespective of
whether the subject matter of such claim shall have occurred before or after such date.

     Section 10.6 Indemnification Calculations. The amount of any and all Losses for which
indemnification is provided under this Article X shall be computed net of any insurance proceeds
received by the indemnified party in connection with such Losses. If an indemnified party receives
insurance proceeds in connection with Losses for which it has received indemnification, such party
shall refund to the indemnifying party the amount of such insurance proceeds when received, up to
the amount of indemnification received. An indemnified party shall use its commercially reasonable
efforts to pursue insurance claims with respect to any Losses. The parties agree that any
indemnification payments made pursuant to this Agreement shall be treated for tax purposes as an
adjustment to the Purchase Price, unless otherwise required by applicable Law.

     Section 10.7 Notice and Opportunity to Defend. If there occurs an event which a party
asserts is an indemnifiable event pursuant to Section 10.1, Section 10.2 and Section 10.3, the
party or parties seeking indemnification shall notify the other party or parties obligated to
provide indemnification (the “Indemnifying Party”) promptly. If such event involves any claim or
the commencement of any action or proceeding by a third person, the party seeking indemnification
will give such Indemnifying Party prompt written notice of such claim or the commencement of such
action or proceeding; provided that the failure to

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provide prompt notice as provided herein will relieve the Indemnifying Party of its
obligations hereunder only to the extent that such failure prejudices the Indemnifying Party
hereunder. In case any such action shall be brought against any party seeking indemnification and
it shall notify the Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to assume the defense thereof, with counsel selected by the Indemnifying Party and, after
notice from the Indemnifying Party to such party or parties seeking indemnification of such
election so to assume the defense thereof, the Indemnifying Party shall not be liable to the party
or parties seeking indemnification hereunder for any legal expenses of other counsel or any other
expenses subsequently incurred by such party or parties in connection with the defense thereof.
The Indemnifying Party and the party seeking indemnification agree to cooperate fully with each
other and their respective counsel in connection with the defense, negotiation or settlement of any
such action or asserted liability. The party or parties seeking indemnification shall have the
right to participate at its or their own expense in the defense of such action or asserted
liability. If the Indemnifying Party assumes the defense of an action no settlement or compromise
thereof may be effected (i) by the Indemnifying Party without the written consent of the
indemnified party (which consent shall not be unreasonably withheld or delayed) or (ii) by the
indemnified party without the consent of the Indemnifying Party (which consent shall not be
unreasonably withheld or delayed). In no event shall an Indemnifying Party be liable for any
settlement effected without its written consent (which consent shall not be unreasonably withheld
or delayed).

     Section 10.8 Payment in Kind. Any indemnity payable by a Selling Shareholder or an
Other Management Party may, at the option of such Selling Shareholder or such Other Management
Party, be paid with FM Ordinary Shares. For the purposes of calculating the number of FM Ordinary
Shares to be paid to satisfy any such indemnity, each FM Ordinary Share shall be valued at an
amount equal to one-fifth of the closing price per ADS on the date one (1) Business Day prior to
the payment of any such indemnity or, if payment of such indemnity in FM Ordinary Shares would be
allowed pursuant to this Section 10.8, in FM Ordinary Shares.

ARTICLE XI.

MISCELLANEOUS

     Section 11.1 Fees and Expenses; Liquidated Damages.

          (a) Except as otherwise provided in this Agreement, each of Buyer, the Company and the Selling
Shareholders shall pay all of its respective out-of-pocket fees and expenses in connection with the
preparation and negotiation of this Agreement and the Ancillary Documents and the consummation of
the transactions contemplated hereby and thereby.

          (b) The total amount of the Deposit shall be (i) returned by the Company to Buyer within two
(2) Business Days following the date of the termination of this Agreement pursuant to Section
9.1(a), Section 9.1(b), Section 9.1(c), Section 9.1(e) or Section 9.1(f), (ii) deducted from the
Initial Cash Consideration payable by Buyer on the First Closing Date as set forth in Section
2.2(a) and paid to the Selling Shareholders and the Option Holders in the same manner as the
Initial Cash Consideration or (iii) deducted from any amount payable by Buyer pursuant to Section
11.1(c).

          (c) The parties agree that the Company’s planned initial public offering constitutes an option
with significant economic value. The parties further agree that the fair

54

 

and reasonable value of this option is equal to US$80,000,000, which amount is the estimated
net proceeds from the Company’s planned initial public offering. Accordingly, if this Agreement is
terminated by the Sellers’ Representative and the Company pursuant to Section 9.1(g), Buyer shall
pay to the Sellers’ Representative, on behalf of the Seller Parties (for distribution to the
Selling Shareholders and Option Holders who elect to have their Company Options cancelled in
exchange for the consideration set forth in Article II, based on the methodology set forth in
Section 2.2(a)) an amount in cash equal to US$80,000,000 as liquidated damages and not as a penalty
(the “Sellers’ Liquidated Damages”). The Sellers’ Liquidated Damages shall be paid within five
Business Days of receipt of written notice from the Sellers’ Representative and the Company. The
Deposit and the funds represented by the Bank Guarantee Letter shall be applied towards Buyer’s
payment obligation with respect to the Sellers’ Liquidated Damages. The Parties agree that the
provisions of this Section 11.1(c) are reasonable and necessary for the protection of the Selling
Shareholders and the Option Holders, and further agree that the said provisions are not excessive
or unduly onerous upon Buyer. However, it is hereby agreed and declared that if any of such
provisions shall be adjudged to be void as going beyond what is reasonable in all the circumstances
for the protection of the Selling Shareholders and the Option Holders, but would be valid if part
of the wording thereof were deleted or the amount of Sellers’ Liquidated Damages reduced or the
scope of the provisions reduced, the said provisions shall apply with such modification or
modifications as may be necessary to make them valid and effective.

          (d) If this Agreement is terminated by Buyer pursuant to Section 9.1(f), the Company shall pay
to Buyer an amount in cash equal to US$80,000,000 in the form of liquidated damages and not as a
penalty (the “Buyer’s Liquidated Damages”). Such amount shall be paid by the Company within five
Business Days of receipt of written notice from Buyer. The Parties agree that the provisions of
this Section 11.1(d) are reasonable and necessary for the protection of Buyer, and further agree
that the said provisions are not excessive or unduly onerous upon Seller Parties or the Company.
However, it is hereby agreed and declared that if any of such provisions shall be adjudged to be
void as going beyond what is reasonable in all the circumstances for the protection of Buyer, but
would be valid if part of the wording thereof were deleted or the amount of Buyer’s Liquidated
Damages reduced or the scope of the provisions reduced, the said provisions shall apply with such
modification or modifications as may be necessary to make them valid and effective.

     Section 11.2 Governing Law. This Agreement shall be construed under and governed by
the Laws of the State of New York.

     Section 11.3 Amendment. This Agreement may not be amended, modified or supplemented
except upon the execution and delivery of a written agreement executed by the parties hereto and
except for the joinder of any additional Selling Shareholders between the date hereof and the First
Closing Date (which additional Selling Shareholders shall be deemed to make the representations and
warranties set forth in Article IV as of the date of their joinder).

     Section 11.4 No Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any party hereto without the prior written consent of
Buyer, in the case of assignment by any of the Seller Parties, and the Seller Parties, in the case
of any assignment by Buyer, provided that Buyer may assign its rights to acquire and hold the
Offered Shares acquired hereunder to an Affiliate but Buyer shall remain liable in all other
respects for the performance of its payment and all other obligations hereunder.

55

 

     Section 11.5 Waiver. Any of the terms or conditions of this Agreement which may be
lawfully waived may be waived in writing at any time by each party which is entitled to the
benefits thereof. Any waiver of any of the provisions of this Agreement by any party hereto shall
be binding only if set forth in an instrument in writing signed on behalf of such party. No failure
to enforce any provision of this Agreement shall be deemed to or shall constitute a waiver of such
provision and no waiver of any of the provisions of this Agreement shall be deemed to or shall
constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

     Section 11.6 Notices.

          (a) Any notice, demand, or communication required or permitted to be given by any provision of
this Agreement shall be deemed to have been sufficiently given or served for all purposes if (i)
personally delivered, (ii) sent by a nationally recognized overnight courier service to the
recipient at the address below indicated or (iii) delivered by facsimile which is confirmed in
writing by sending a copy of such facsimile to the recipient thereof pursuant to clause (i) or (ii)
above:

          If to Buyer:

Focus Media Holding Limited

28-30/F, Zhao Feng World Trade Building

369 Jiangsu Road

Shanghai 200050 PRC

Attn: Daniel Wu, Chief Financial Officer

+86 21 3212 4661 ex. 6339 (tel)

+86 21 5240 0228 (fax)

Wilson Sonsini Goodrich & Rosati

Jin Mao Tower

38F, Unit 01-04

88 Century Boulevard

Pudong, Shanghai 200121

People’s Republic of China

Attn: Carmen Chang

Don S. Williams

+86 21 6165 1700 (tel)

+86 21 6165 1799 (fax)

          If to any of the Selling Shareholders, to the Sellers’ Representative:

Mr. Yising Chan

c/o CGEN Digital Media Company Limited

Suite 3213-14, Tower B, City Center of Shanghai

No. 100 Zunyi Road, Shanghai 200051,

China

+86 21 6237 2250 (tel)

+86 21 6237 1918 (fax)

ys.chan@cgenmedia.cn (email)

          and

56

 

Latham & Watkins LLP

41/F, One Exchange Square

8 Connaught Place

Central, Hong Kong

Attn: David Zhang, Esq.

+852 2522 7886 (tel)

+852 2522 7006 (fax)

or to such other address as any party hereto may, from time to time, designate
in a written notice given in like manner.

          (b) Except as otherwise provided herein, any notice under this Agreement will be deemed to
have been given (x) on the date such notice is personally delivered or delivered by facsimile or
(y) the next succeeding Business Day after the date such notice is delivered to the overnight
courier service if sent by overnight courier; provided that in each case notices received after
4:00 p.m. (local time of the recipient) shall be deemed to have been duly given on the next
Business Day.

          (c) For convenience only, the parties agree that all notices, consents, directions or other
actions that may be given or taken hereunder by the Seller Parties may be given by the Sellers’
Representative on behalf of the Seller Parties pursuant to a written instruction or document duly
executed by the Seller’s Representative and that Buyer shall treat any such instrument or document
as the action of the Seller Parties hereunder.

     Section 11.7 Complete Agreement. This Agreement, the Confidentiality Agreement, the
Ancillary Documents and the other documents and writings referred to herein or delivered pursuant
hereto contain the entire understanding of the parties with respect to the subject matter hereof
and thereof and supersede all prior agreements and understandings, both written and oral, between
the parties with respect to the subject matter hereof and thereof. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

     Section 11.8 Counterparts. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and each of which shall be deemed an
original.

     Section 11.9 Publicity. The Seller Parties and Buyer will consult with each other and
will mutually agree upon any publication or press release of any nature with respect to this
Agreement or the transactions contemplated hereby and shall not issue any such publication or press
release prior to such consultation and agreement except as may be required by applicable Law or by
obligations pursuant to any listing agreement with any securities exchange or any securities
exchange regulation, in which case the party proposing to issue such publication or press release
shall make all reasonable efforts to consult in good faith with the other party or parties before
issuing any such publication or press release and shall provide a copy thereof to the other party
or parties prior to such issuance.

     Section 11.10 Headings. The headings contained in this Agreement are for reference
only and shall not affect in any way the meaning or interpretation of this Agreement.

57

 

     Section 11.11 Severability. Any provision of this Agreement which is invalid, illegal
or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity, illegality or unenforceability, without affecting in any way the remaining
provisions hereof in such jurisdiction or rendering that or any other provision of this Agreement
invalid, illegal or unenforceable in any other jurisdiction.

     Section 11.12 Third Parties. Nothing herein expressed or implied is intended or shall
be construed to confer upon or give to any Person or corporation, other than the parties hereto and
their permitted successors or assigns, any rights or remedies under or by reason of this Agreement.

     Section 11.13 Dispute Resolution.

          (a) Any dispute, controversy or claim arising out of or relating to this Agreement, or the
interpretation, breach, termination or validity hereof, shall be resolved through consultation.
Such consultation shall begin immediately after one party hereto has delivered to any other party
hereto a written request for such consultation. If within thirty (30) days following the date on
which such notice is given the dispute cannot be resolved, the dispute shall be submitted to
arbitration upon the request of any party to such dispute with notice to the others.

          (b) The arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong
International Arbitration Centre (the “HKIAC”). There shall be three (3) arbitrators. Each opposing
party to a dispute shall be entitled to appoint one arbitrator, and the third arbitrator shall be
jointly appointed by the disputing parties or, failing such agreement by thirty (30) days after the
appointment by each party of its arbitrator, the HKIAC shall appoint the third arbitrator.

          (c) The arbitration proceedings shall be conducted in English. The arbitration tribunal shall
apply the UNCITRAL Arbitration Rules as administered by the HKIAC at the time of the arbitration.

          (d) The arbitrators shall decide any dispute submitted by the parties to the arbitration
strictly in accordance with the substantive laws of New York and shall not apply any other
substantive law.

          (e) Each party hereto shall cooperate with the other in making full disclosure of and
providing complete access to all information and documents requested by the others in connection
with such arbitration proceedings, subject only to any confidentiality obligations binding on such
party.

          (f) The award of the arbitration tribunal shall be final and binding upon the disputing
parties, and the prevailing party or parties may apply to a court of competent jurisdiction for
enforcement of such award.

          (g) Any party shall be entitled to seek preliminary injunctive relief from any court of
competent jurisdiction pending the constitution of the arbitral tribunal.

     Section 11.14 Obligations of Selling Shareholders. The parties acknowledge and agree
that the rights and obligations of the Selling Shareholders hereunder are several and not joint or
joint and several.

58

 

[remainder of page intentionally left blank]

59

 

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by its
duly authorized officer, in each case as of the date first above written.

	 	 	 	 	 
	 	FOCUS MEDIA HOLDING LIMITED

 	 
	 	By:  	/s/ Jiang Nanchun
 	 
	 	 	Name:  	Jiang Nanchun 	 
	 	 	Title:  	Chief Executive Officer & Chairman 	 
	 
	 	WITNESSED BY:

 	 
	 	/s/ Alex Yang
 	 
	 	Name: Alex Yang 	 
	 	Title: General Counsel 	 
	 
	 	CGEN DIGITAL MEDIA COMPANY LIMITED

 	 
	 	By:  	/s/ Mei Lijun
 	 
	 	 	Name:  	Mei Lijun 	 
	 	 	Title:  	Director 	 
	 
	 	WITNESSED BY:

 	 
	 	/s/ Cao Xiao Feng
 	 
	 	Name: Cao Xiao Feng 	 
	 	Title: Company Secretary 	 

60

 

	 	 	 	 	 

	 	 	 	 	 
	 	CHAN YI SING

(in his capacity as Selling Shareholder, Sellers’

Representative and Option Holders’
 Representative)

 	 
	 	/s/ Chan Yi Sing
 	 
	 	 	 
	 
	 	GUANYONG TIAN

 	 
	 	/s/ Guanyong Tian
 	 
	 	 	 
	 
	 	MEI LIJUN

 	 
	 	/s/ Mei Lijun
 	 
	 	 	 
	 
	 	TDF CAPITAL CHINA II, LP

 	 
	 	By:  	/s/ Goh Yin Long
 	 
	 	 	Name:  	Goh Yin Long 	 
	 	 	Title:  	Investment Director 	 
	 
	 
	 	TDF CAPITAL ADVISORS, LP

 	 
	 	By:  	/s/ Goh Yin Long
 	 
	 	 	Name:  	Goh Yin Long 	 
	 	 	Title:  	Investment Director 	 
	 
	 
	 	REDPOINT VENTURES II, L.P.,

by its General Partner

Redpoint Ventures II, LLC

 	 
	 	By:  	/s/ John L. Walecka
 	 
	 	 	Name:  	John L. Walecka 	 
	 	 	Title:  	Managing Director 	 

61

 

	 	 	 	 	 

	 	 	 	 	 
	 	REDPOINT ASSOCIATES II, LLC,

as nominee

 	 
	 	By:  	/s/ John L. Walecka
 	 
	 	 	Name:  	John L. Walecka 	 
	 	 	Title:  	Managing Director 	 
	 
	 
	 	JAFCO ASIA TECHNOLOGY FUND III

 	 
	 	By:  	/s/ Hiroshi Yamada
 	 
	 	 	Name:  	Hiroshi Yamada 	 
	 	 	Title:  	Attorney 	 
	 
	 
	 	S.I. TECHNOLOGY VENTURE CAPITAL LIMITED

 	 
	 	By:  	/s/ Zhou Jie
 	 
	 	 	Name:  	Zhou Jie 	 
	 	 	Title:  	Director 	 
	 
	 
	 	SUMITOMO CORPORATION EQUITY ASIA LIMITED

 	 
	 	By:  	/s/ Tsuyoshi Konda
 	 
	 	 	Name:  	Tsuyoshi Konda 	 
	 	 	Title:  	Managing Director 	 
	 
	 
	 	INVESTLINK CONSULTING (CHINA) LIMITED

 	 
	 	By:  	/s/ Nina Yeung
 	 
	 	 	Name:  	Nina Yeung 	 
	 	 	Title:  	Director 	 

62

 

	 	 	 	 	 

	 	 	 	 	 
	 	HUITUNG INVESTMENTS (BVI) LIMITED

 	 
	 	By:  	/s/ Tsui-Hui Huang
 	 
	 	 	Name:  	Tsui-Hui Huang 	 
	 	 	Title:  	President 	 
	 
	 
	 	CPI BALLPARK INVESTMENTS LTD

 	 
	 	By:  	/s/ David Noh
 	 
	 	 	Name:  	David Noh 	 
	 	 	Title:  	Managing Director 	 
	 
	 
	 	TOTNES INTERNATIONAL LIMITED

 	 
	 	By:  	/s/ Steve Chu
 	 
	 	 	Name:  	Steve Chu 	 
	 	 	Title:  	Director 	 
	 
	 
	 	MEDLEY OPPORTUNITY FUND LTD.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

63

 

Schedule 1.1A

COMPLETE LIST OF ANCILLARY DOCUMENTS

Key Company Employee Employment Agreements

Loan Repayment Loan Agreement

Registration Rights Agreement

 

 

Schedule 1.1B

RELEVANT PERSONS FOR PURPOSES OF KNOWLEDGE OF BUYER

Jason Jiang

Daniel Mingdong Wu

 

 

Schedule 1.1C

RELEVANT PERSONS FOR KNOWLEDGE OF SELLER PARTIES

Yising Chan

Lijun Mei

 

 

Schedule 6.13(e)

ACCOUNTING POLICIES

 

 

Schedule 7.3

NONE

 

 

Schedule 8.3(c)

NONE

 

 

Disclosure Schedule

 

 

Exhibit A

Unaudited Financial Statements

 

 

Exhibit B

Form of Registration Rights Agreement

 

 

Exhibit C

Form of Legal Opinion of Cayman Islands Counsel to Buyer

 

 

Exhibit D 

Form of Key Company Employee Employment Agreement

 

 

Exhibit E

Form of Legal Opinion of Cayman Islands Counsel

to Group Companies and Selling Shareholders

 

 

Exhibit F

Form of Legal Opinion of PRC Counsel to

Group Companies and Selling Shareholders

 

 

Exhibit G

Medley Payoff Statement

 

 

Exhibit H

Form of Notice to Option Holders

Re: Cancellation of Company Stock Options

 

 

Exhibit I

Form of Loan Repayment Loan Agreement

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