TERMINATION AND RELEASE AGREEMENT
Exhibit 10.168
This TERMINATION AND RELEASE AGREEMENT (this “Agreement”) is made as of December 8, 2008 by
and between Focus Media Holding Limited, a company with limited liability organized under the laws
of the Cayman Islands (“Buyer”); CGEN Digital Media Company Limited, a company with limited
liability organized under the laws of the Cayman Islands (the “Company”); Mr. Yising Chan (the
“Sellers’ Representative”) in his capacity as representative of certain former shareholders of the
Company as set forth on Schedule I hereto (collectively, the “Selling Shareholders”) and with
regard to Section 3 only, certain former option holders of the Company as set forth on Schedule II
hereto (collectively, the “Option Holders” and together with the Selling Shareholders, the
“Holders”); Mr. Yising Chan in his individual capacity; Mr. Guanyong Tian and Xx. Xxx Xxxxx
(Messrs. Chan, Tian and Mei collectively, the “Management Parties”). Each of the above parties is
sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
Capitalized terms used but not otherwise defined herein shall have the meanings given them in the
Purchase Agreement (as defined below).
RECITALS
WHEREAS, Buyer, the Company, the Selling Shareholders and the Management Parties are parties
to that certain Share Purchase Agreement dated as of December 8, 2007 (the “Purchase Agreement”);
WHEREAS, the First Closing took place on January 2, 2008 pursuant to Section 2.3 of the
Purchase Agreement and the Company has become a wholly owned subsidiary of Buyer;
WHEREAS, Buyer entered into the Key Employee Service Agreements with the Management Parties on
the First Closing Date in connection with the First Closing;
WHEREAS, Buyer and the Holders entered into the Registration Rights Agreement on the First
Closing Date in connection with the First Closing;
WHEREAS, the Second Closing and Third Closing contemplated in the Purchase Agreement have not
taken place;
WHEREAS, Section 2.2(b) (ii) of the Purchase Agreement provides that if the 2008 Audited
Annual Net Income is less than US$9,625,000, Buyer shall have the right to terminate the Management
Parties and terminate the Purchase 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;
WHEREAS, the Parties agree and acknowledge that, based on the Company’s management accounts
covering the period from January 1 2008 through October 31 2008, which accounts are
attached hereto as Schedule III (the “Management Accounts”) as prepared by the Management
Parties, the 2008 Audited Annual Net Income will be significantly less than US$9,625,000 and wish
to terminate the Purchase Agreement, the Key Employee Service Agreement and Registration Rights
Agreement immediately.
and
WHEREAS, pursuant to Section 2.9 of the Purchase Agreement, the Selling Shareholders appointed
Mr. Yising Chan as the Selling Shareholder’s attorney-in-fact and representative, to amend, cancel
or extend, or waive the terms of, the Purchase 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.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual promises set forth in this
Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows:
1. Termination of Purchase Agreement. Except as provided in this Agreement, the
Parties hereby terminate the Purchase Agreement, effective immediately, and the Parties shall have
no further rights, obligations or responsibilities under the Purchase Agreement including, without
limitation, with respect to (i) Buyer’s responsibility for any payment with respect to the Second
Installment Consideration, the Third Installment Consideration, the Base Catchup Amount, and (ii)
each of the covenants and agreements set forth in Article VI of the Purchase Agreement.
2. Termination of Key Employee Service Agreements. Buyer and each of the Management
Parties hereby terminate their respective Key Employee Service Agreements and the employment of the
Management Parties with Buyer is hereby terminated; provided, however, that, notwithstanding the
foregoing, each of Section 6 (Responsibilities of Termination), Section 7 (Post-termination
Activities), Section 8 (Proprietary Information), Section 12.7 (Notice), Section 12.8
(Severability; Enforceability), Section 12.9 (Governing Law), Section 12.10 (Dispute Resolution)
and Section 12.11 (Survival) of each such Key Employee Service Agreement shall survive such
termination and remain effective in accordance with its terms; provided further, however, that the
parties hereto agree that Section 7.2 (a) of each of the Key Employee Service Agreement shall be
amended and restated in its entirety to read as follows: “Within two (2) years after the expiration
or termination of this Agreement, the Key Employee shall not, directly or indirectly, be engaged in
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 in any place
throughout China; provided, however, that the Key Employee may hold up to five percent of the
outstanding voting securities of any entity that is listed at a stock exchange and engaged in the
said business, to the extent that the Key Employee has no other relation or association with such
entity.”
3. Termination of Registration Rights Agreement. The Parties agree and acknowledge
that no CGEN Registrable Securities (as defined in the Registration Rights Agreement) have been or
will be issued to the Holders in connection with the Purchase Agreement and the Registration
Rights Agreement is therefore moot. Buyer and the Holders (via Sellers’ Representative) hereby
terminate the Registration Rights Agreement effective immediately and acknowledge and agree that
they shall have no further rights, obligations or responsibilities thereunder.
4. Waiver and Release. Each Party, on its own behalf, and on behalf of its heirs,
family members, executors, agents, members, limited partners, shareholders, affiliates, employees,
officers, directors, successors and assigns, hereby fully and forever releases the other Parties
and their respective current and former officers, directors, employees, agents, attorneys,
trustees, shareholders, investors, stockholders, administrators, affiliates, divisions,
subsidiaries, predecessor and successor corporations and assigns, and agrees not to xxx concerning,
or in any manner to institute, prosecute, or pursue, any and all claims, duties, charges,
complaints, obligations or causes of action relating to the declaration and/or payment of any
dividend paid pursuant to the Purchase Agreement and the terminated provisions of the Purchase
Agreement, the Key Employee Service Agreements and the Registration Rights Agreement, whether
presently known or unknown, suspected or unsuspected, that such Party may possess arising from any
and all omissions, acts, facts or damages that have occurred up until and including the date of
this Agreement with respect to the declaration and payment of any dividend paid pursuant to the
Purchase Agreement, the terminated provisions of the Purchase Agreement, the Key Employee Service
Agreement and Registration Rights Agreement (the “Waiver and Release”). Each Party agrees that the
Waiver and Release shall be and remain in effect in all respects as a complete general release as
to the matters released. This Waiver and Release does not extend to any obligations incurred under
this Agreement.
5. Release of Unknown Claims. Each of the Parties acknowledges that it has been
advised to consult with legal counsel and is familiar with any applicable law that may otherwise
prohibit the release of unknown claims and hereby expressly waives any such rights such Party may
have thereunder.
6. Miscellaneous. The rights and obligations under this Agreement shall not be
assignable by any Party without the consent of the other Parties. This Agreement shall be
governed, construed and interpreted in accordance with the laws of the State of New York, United
States without giving effect to principles of conflicts of law that would direct the application of
laws other than the laws of the State of New York. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which together shall constitute
one instrument. Any term of this Agreement may be amended or waived only with the written consent
of the Parties.
(Remainder of Page Intentionally Left Blank)
IN WITNESS WHEREOF, the undersigned have executed this Termination and Release Agreement as of
the date first set forth above.
FOCUS MEDIA HOLDING LIMITED |
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By: | /s/ Jiang Nanchun | |||
Name: Jiang Nanchun | ||||
Title: Chairman | ||||
CGEN DIGITAL MEDIA COMPANY LIMITED |
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By: | /s/ Yi Sing Chan | |||
Name: Yi Sing Chan | ||||
Title: Director | ||||
XXXX XX SING (in his capacity as Sellers’ Representative) |
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/s/ Xxxx Xx Sing |
Signature Page to Termination and Release Agreement
IN WITNESS WHEREOF, the undersigned have executed this Termination and Release Agreement as of
the date first set forth above.
“MANAGEMENT PARTIES” XXXX XX SING |
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/s/ Xxxx Xx Sing | ||||
GUANYONG TIAN |
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/s/ Guanyong Tian | ||||
XXX XXXXX |
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/s/ Xxx Xxxxx |
Signature Page to Termination and Release Agreement
Schedule I
Selling Shareholders
Schedule II
Option Holders
Schedule III
Management Accounts