EX-10.19 26 h01498exv10w19.txt EX-10.19 SHAREHOLDERS' VOTING RIGHTS PROXY AGREEMENT, DATED JANUARY 13, 2006, BY AND AMONG SHANGHAI FOCUS MEDIA ADVERTISEMENT CO., LTD., SHANGHAI FOCUS MEDIA CO., LTD., SHANGHAI FRAMEDIA INVESTMENT C Ex. 10.19 Confidential SHAREHOLDERS' VOTING RIGHTS PROXY AGREEMENT AMONG SHANGHAI FOCUS MEDIA ADVERTISEMENT CO., LTD. SHANGHAI FOCUS MEDIA CO., LTD. SHANGHAI FRAMEDIA INVESTMENT CONSULTANCY CO., LTD AND LOCAL ADVERTISEMENT COMPANIES LISTED IN APPENDIX I JANUARY 13, 2006 SHAREHOLDERS' VOTING RIGHTS PROXY AGREEMENT This SHAREHOLDERS' VOTING RIGHTS PROXY AGREEMENT (this "AGREEMENT") is entered into as of January 13, 2006 by and among the following Parties: (1) SHANGHAI FOCUS MEDIA ADVERTISEMENT CO., LTD. (hereinafter "FOCUS MEDIA ADVERTISEMENT") REGISTERED ADDRESS: F Room 1003, No.1027, Changning Road, Changning District, Shanghai LEGAL REPRESENTATIVE: Jason Nanchun Jiang (2) SHANGHAI FOCUS MEDIA CO., LTD.(HEREINAFTER "FOCUS MEDIA") REGISTERED ADDRESS: Room A65, 28 Floor, No.369, Jiangsu Road, Changning District, Shanghai LEGAL REPRESENTATIVE: Jason Nanchun Jiang (3) SHANGHAI FRAMEDIA INVESTMENT CONSULTANCY CO., LTD (HEREINAFTER "FRAMEDIA INVESTMENT") REGISTERED ADDRESS: Room 1, 17 Lan, Hengshan Rd., Shanghai LEGAL REPRESENTATIVE: Jason Nanchun Jiang (4) THE LOCAL ADVERTISEMENT COMPANIES LISTED IN APPENDIX I TO THE AGREEMENT. (The above Parties hereinafter each referred to as a "PARTY" individually, and collectively, the "PARTIES". Among them, Focus Media Advertisement and Focus Media hereinafter referred to as a "SHAREHOLDER" individually, and collectively, the "SHAREHOLDERS".) WHEREAS: 1. As of the date of the Agreement the Shareholders are the enrolled shareholders of the companies listed in Appendix I to this Agreement, legally holding jointly all the equity interest in the companies listed in Appendix I to this Agreement; 2. The Shareholders intend to severally entrust the individual designated by Framedia Investment with the exercises of their voting rights in Target Company (as defined below) while Framedia Investment is willing to designate such an individual. The Parties hereby have reached the following agreement upon friendly consultations: ARTICLE 1 VOTING RIGHTS ENTRUSTMENT 1 1.1 Under this Agreement, "TARGET COMPANY" shall mean any and all companies listed in Appendix I. 1.2 The Shareholders hereby irrevocably undertake to respectively sign the Entrustment Letter after execution of the Agreement to respectively entrust the one designated by Framedia Investment (collectively, "TRUSTEES") to exercise the following rights respectively enjoyed by them as shareholders of Target Company in accordance with the then effective articles of association of Target Company (collectively, the "ENTRUSTED RIGHTS"): (1) Proposing to convene and attending shareholders' meetings of Target Company as proxy of the Shareholders according to the articles of association of Target Company; (2) Exercising voting rights as proxy of the Shareholders, on issues discussed and resolved by the shareholders' meeting of Target Company, including but not limited to the appointment and election for the directors, general manager and other senior management personnel of Target Company. The above authorization and entrustment is granted subject to the status of trustees as PRC citizens and the approval by Framedia Investment. Upon and only upon written notice of dismissing and replacing Trustee(s) given by Framedia Investment to the Shareholders, the Shareholders shall promptly entrust another PRC citizen then designated by Framedia Investment to exercise the above Entrusted Rights, and once new entrustment is made, the original entrustment shall be replaced; the Shareholders shall not cancel the authorization and entrustment of the Trustee(s) otherwise. 1.3 The Trustees shall perform the entrusted obligation within the scope of entrustment in due care and prudence and in compliance with laws; the Shareholders acknowledge and assume relevant liabilities for any legal consequences of the Trustees' exercise of the foregoing Entrusted Rights. 1.4 The Shareholders hereby acknowledge that the Trustees are not required to seek advice from the Shareholders prior to their respective exercise of the foregoing Entrusted Rights. However, the Trustees shall inform the Shareholders in a timely manner of any resolution or proposal on convening interim shareholders' meeting after such resolution or proposal is made. ARTICLE 2 RIGHT TO INFORMATION 2.1 For the purpose of exercising the Entrusted Rights under this Agreement, the Trustees are entitled to know the information with regard to Target Company's 2 operation, business, clients, finance, staff, etc., and shall have access to relevant materials of Target Company. Target Company shall adequately cooperate with the Trustees in this regard. ARTICLE 3 EXERCISE OF ENTRUSTED RIGHTS 3.1 The Shareholders will provide adequate assistance to the exercise of the Entrusted Rights by the Trustees, including execution of the resolutions of the shareholders' meeting of Target Company or other pertinent legal documents made by the Trustee when necessary (e.g., when it is necessary for examination and approval of or registration or filing with governmental departments). 3.3 If at any time during the term of this Agreement, the entrustment or exercise of the Entrusted Rights under this Agreement is unenforceable for any reason except for default of any Shareholder or Target Company, the Parties shall immediately seek a most similar substitute for the unenforceable provision and, if necessary, enter into supplementary agreement to amend or adjust the provisions herein, in order to ensure the realization of the purpose of this Agreement. ARTICLE 4 EXEMPTION AND COMPENSATION 4.1 The Parties acknowledge that Framedia Investment shall not be requested to be liable for or compensate (monetary or otherwise) other Parties or any third party due to exercise of Entrusted Rights by the Trustees designated by Framedia Investment under this Agreement. 4.2 Target Company and the Shareholders agree to compensate Framedia Investment for and hold it harmless against all losses incurred or likely to be incurred by it due to exercise of the Entrusted Rights by the Trustees designated by Framedia Investment, including without limitation any loss resulting from any litigation, demand arbitration or claim initiated or raised by any third party against it or from administrative investigation or penalty of governmental authorities. However, the Shareholders and Target Company will not compensate for losses incurred due to wilful misconduct or gross negligence of Framedia Investment. ARTICLE 5 REPRESENTATIONS AND WARRANTIES 5.1 Each of the Personal Shareholders hereby severally and jointly represents and warrants that: 5.1.1 Each of the Shareholders is a company with limited liability duly organized and validly existing under the PRC Law and is a company with full and independent legal status and legal capacity to execute, deliver and perform this Agreement, and may act independently as a 3 litigant party. 5.1.2 Each of the Shareholders has full power and authorization to execute and deliver this Agreement and all the other documents to be entered into by it in relation to the transaction referred to herein, and it has the full power and authorization to complete the transaction referred to herein. 5.1.3 The Shareholders are the enrolled legal owner of the Option Equity as of the effective date of this Agreement, and except the rights created by this Agreement, the Equity Pledge Agreement (the "EQUITY PLEDGE AGREEMENT") and the Shareholders' Voting Rights Proxy Agreement (the "PROXY AGREEMENT") entered into by the Shareholders, Target Companies and Framedia Investment dated [__] 2006, there is no third party rights on the Entrusted Right. Pursuant to this Agreement, the Trustees may fully and sufficiently exercise the Entrusted Rights in accordance with the then effective articles of association of Target Company. 5.2 Target Company hereby in respect of themselves respectively represents and warrants that: 5.2.1 it is a company with limited liability properly registered and legally existing under PRC laws, with an independent legal person status, and with full and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act independently as a subject of actions; and 5.2.2 it has the full corporate power and authority to execute and deliver this Agreement and all the other documents to be entered into by it in relation to the transaction contemplated hereunder, and has the full power and authority to consummate such transaction. 5.2.3 the Shareholders are enrolled shareholders as of the effective date of this Agreement, legally holding the equity interest in it set out in Appendix I. Except rights created by this Agreement, the Equity Pledge Agreement and the Call Option Agreement, there exists no third party right on the Entrusted Rights. Pursuant to this Agreement, the Trustees may fully and sufficiently exercise the Entrusted Rights in accordance with the then effective articles of association of Target Company. 5.2.4 Considering the fact that the Shareholders of Target Company will set aside all the equity interest held thereby in Target Company as 4 security to secure the performance of the contractual obligations by Target Company under the Call Option Agreement and Technology Permission and Service Agreement, Target Company undertakes to, during the valid term of this Agreement, make full and due performance of any and all obligations under the Call Option Agreement and Technology Permission and Service Agreement, and warrant that no adverse impact on the exercise of the Entrusted Rights hereunder by the Trustees will be incurred due to the breach of the Call Option Agreement and Technology Permission and Service Agreement by Target Company. ARTICLE 6 TERM OF AGREEMENT 6.1 Limited by the Article 6.2 and 6.3 of this Agreement, this Agreement shall take effect as of the date of formal execution by the Parties with the term of twenty (20) years, unless the Parties terminate the Agreement with the written agreement in advance, or the Parties terminate the Agreement in accordance with section 8.1 of this Agreement. Upon the expiration of this Agreement, the Agreement will be automatically renewed for one (1) year, unless Framedia Investment gives the other Parties written notice of its intention not renew at least thirty (30) days prior to expiration. 6.2 In case that a Shareholder transfers all of the equity interest held by it in Target Company with prior consent of Framedia Investment, such Shareholder shall no longer be a Party to this Agreement (to the extent that it acts as the shareholder of such Target Company) whilst the obligations and commitments of the other Sarties under this Agreement shall not be adversely affected thereby. 6.3 During the term of this Agreement, should the term of operation of any Target Company terminate by any reason; this Agreement to such Target Company and its shareholders (to the extent that it acts as the shareholder of such Target Company) will be terminated. ARTICLE 7 NOTICE 7.1 Any notice, request, demand and other correspondences made as required by or in accordance with this Agreement shall be made in writing and delivered to the relevant Party. 7.2 The abovementioned notice or other correspondences shall be deemed to have been delivered when (i) it is transmitted if transmitted by facsimile, or (ii) it is delivered if delivered in person, or (iii) when five (5) days have elapsed after posting the same if posted by mail. 5 ARTICLE 8 DEFAULT LIABILITY 8.1 The Parties agree and confirm that, if any of the Parties (the "DEFAULTING PARTY") breaches substantially any of the provisions herein or fails substantially to perform any of the obligations hereunder, such a breach or failure shall constitute a default under this Agreement (a "DEFAULT"). In such event any of the other Parties without default (a "NON-DEFAULTING PARTY") who incurs losses arising from such a Default shall have the right to require the Defaulting Party to rectify such Default or take remedial measures within a reasonable period. If the Defaulting Party fails to rectify such Default or take remedial measures within such reasonable period or within ten (10) days of a Non-defaulting Party's notifying the Defaulting Party in writing and requiring it to rectify the Default, then the relevant Non-defaulting Party shall be entitled to choose at its discretion to (1) terminate this Agreement and require the Defaulting Party to indemnify all damages, or (2) require specific performance by the Defaulting Party of this Agreement and indemnifation against all damages. 8.2 The Parties agree and confirm, the Shareholders or Target Company shall not request the termination of this Agreement for whatsoever reason and under whatsoever circumstance, except otherwise stipulated by laws or this Agreement. 8.3 Notwithstanding any other provisions herein, the validity of this Article shall not be affected by the suspension or termination of this Agreement. ARTICLE 9 MISCELLANEOUS 9.1 This Agreement shall be prepared in Chinese language in five (5) original copies, with each involved Party holding one (1) copy hereof. 9.2 The conclusion, validity, execution, amendment, interpretation and termination of this Agreement shall be governed by laws of the PRC. 9.3 Any disputes arising from and in connection with this Agreement shall be settled through consultations among the Parties involved, and if the Partiesinvolved fail to reach an agreement regarding such a dispute within thirty (30) days of its occurrence, such dispute shall be submitted to [China International Economic and Trade Arbitration Commission Shanghai Branch] for arbitration in [Shanghai] in accordance with the arbitration rules of such commission, and the arbitration award shall be final and binding on all the Parties involved. 9.4 Any rights, powers and remedies empowered to any Party by any provisions herein shall not preclude any other rights, powers and remedies enjoyed by such Party in accordance with laws and other provisions under this Agreement, and a Party's exercise of any of its rights, powers and remedies shall not preclude its 6 exercise of other rights, powers and remedies of it. 9.5 Any failure or delay by a Party in exercising any of its rights, powers and remedies hereunder or in accordance with laws (the "PARTY'S RIGHTS") shall not lead to a waiver of such rights, and the waiver of any single or partial exercise of the Party's Rights shall not preclude such Party from exercising such rights in any other way or exercising the remaining part of the Party's Rights. 9.6 The titles of the Articles contained herein are for reference only, and in no circumstances shall such titles be used for or affect the interpretation of the provisions hereof. 9.7 Each provision contained herein shall be severable and independent from each of other provisions. If at any time any one or more articles herein become invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions herein shall not be affected thereby. 9.8 Upon execution, this Agreement shall replace any other previous legal documents entered into by relevant Parties on the same subject matter. 9.9 Any amendments or supplements to this Agreement shall be made in writing and shall take effect only when properly signed by the Parties to this Agreement. Notwithstanding the preceding sentence, considering that the rights and obligations of each Target Company and its Shareholders are independent and severable from each other, in case that the amendment or supplement to this Agreement is intended to have impact upon one of the Target Companies and its Shareholders, such amendment or supplement requires only the approval of Framedia Investment, the Target Company and its Shareholder while no consent is necessary from the other Target Companies and their Shareholders (to the extent that the amendment or supplement does not have impact upon such other Shareholders). 9.10 In respect of the Shareholder and Target Company, they shall not assign any of their rights and/or transfer any of their obligations hereunder to any third parties without prior written consent from Framedia Investment; Framedia Investment shall have the right to assign any of its rights and/or transfer any of its obligations hereunder to any third parties designated by it after giving notice to the Shareholders. 9.11 This Agreement shall be binding on the legal successors of the Parties. 9.12 The rights and obligations of Target Companies are severable and independent, performance of this Agreement by any Shareholder and any Target Company shall not affect the performance by the other Shareholders and other Target 7 Companies. [The remiander of this page is left blank] 8 IN WITNESS HEREOF, the following Parties have caused this Shareholders' Voting Rights Proxy Agreement to be executed as of the date and in the place first here above mentioned. SHANGHAI FOCUS MEDIA ADVERTISEMENT CO., LTD. (chop) Signature by: /s/ Jason Nanchun Jiang -------------------------- Name: Jason Nanchun Jiang Position: Legal Representative SHANGHAI FOCUS MEDIA CO., LTD (chop) Signature by: /s/ Jason Nanchun Jiang -------------------------- Name: Jason Nanchun Jiang Position: Legal Representative SHANGHAI FRAMEDIA INVESTMENT CONSULTANCY CO., LTD (chop) Signature by: /s/ Zhi Tan -------------------------- Name: Zhi Tan Position: Legal Representative SHANGHAI FRAMEDIA ADVERTISEMENT DEVELOPMENT CO., LTD (chop) Signature by: /s/ Jason Nanchun Jiang -------------------------- Name: Jason Nanchun Jiang Position: Legal Representative SHANGHAI NEW FRAME ADVERTISEMENT CO., LTD (chop) Signature by: /s/ Jason Nanchun Jiang -------------------------- Name: Jason Nanchun Jiang Position: Legal Representative 9 APPENDIX I: BASIC INFORMATION OF THE TARGET COMPANIES
REGISTERED REGISTERED LEGAL COMPANY NAME ADDRESS CAPITAL (RMB) REPRESENTATIVE EQUITY STRUCTURE ------------ ------------ ------------- --------------- ----------------- Shanghai Framedia Room 20, 1,000,000 Jason Focus Media Advertisement Development 77 Lane, Nanchun Jiang Advertisement: Co., Ltd Yueyang Rd. 90% Focus Media: 10% Shanghai New Frame Room 1, 1,000,000 Jason Focus Media Advertisement Co., Ltd 17 Lane, Nanchun Jiang Advertisement: Hengshan Rd. 90% Focus Media: 10%
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