EXHIBIT 10.13
CALL OPTION AGREEMENT
Between
BEIJING XXXX XXXXX SI JIN ADVERTISING COMPANY LIMITED
and
00XXX.XXX INC.
Call Option Agreement
This Call Option Agreement (the "AGREEMENT") is made and entered into as of
August 1, 2002 by and between:
(1) BEIJING XXXX XXXXX SI JIN ADVERTISING COMPANY LIMITED, a limited liability
company organized and existing under the PRC Law, with its registered
office at the premises of the Government of Yujiawu Hui Nationality
Township, Tongzhou District, Beijing, PRC (the "PARTY A"); and
(2) 00XXX.XXX INC., a company organized and existing under the laws of the
British Virgin Islands, with its registered office at c/o Offshore
Incorporation Centre, P.O. Box 957, Road Town, Tortola, British Virgin
Islands (the "PARTY B").
WHEREAS:
(1) Qianjin Network Information Technology (Shanghai) Company Limited ("TECH
JV"), a Chinese-Foreign joint venture company organized and existing under
the PRC Law, and its business scope is to design and develop software,
multi-media and network system, related applications and relevant
information services, design and produce Internet advertisements, launch
Internet advertisements through xxx.00xxx.xxx, and provide career services
and human resources (HR) services (operated with licenses, if required);
(2) Shanghai Qianjin Culture Communication Company Limited ("ADCO"), a limited
liability company organized and existing under the PRC Law, and its
business scope is to design and produce all kinds of advertisements, and
represent as agency for domestic advertisement (operated with licenses);
(3) Party A owns 1% of the total issued and outstanding shares of Tech JV, and
20% of the total issued and outstanding shares of AdCo; and
(4) Party A desires to sell to Party B and/or a company or person designated
by Party B and Party B and/or a company or person designated by Party B
desires to purchase from Party A 1% of the total issued and outstanding
shares of Tech JV and 20% of the total issued and outstanding shares of
AdCo subject to the PRC laws.
NOW THERFORE, upon friendly consultations and based on a principle of equality
and mutual benefits, Party A and Party B hereof agree as follows:
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ARTICLE I DEFINITIONS
1.1 Unless otherwise defined hereof, the following terms shall have the
following meanings:
"APPROVAL" any approval, consent, license, permit obtained from and/or
issued by any PRC administrative authority in accordance with
the PRC Law, including without limitations the approval of
government authority of foreign trade and economy regarding
the establishment of foreign investment enterprises ("FIE")
and any change accordingly;
"OPTION" the right of Party B and/or the company or person designated
by Party B to acquire from Party A 1% of the total issued and
outstanding shares of Tech JV and 20% of the total issued and
outstanding shares of AdCo in accordance with the terms and
conditions of this Agreement;
"PRC" the Peoples' Republic of China, for purposes of this
Agreement, excluding Hong Kong, Macao and Taiwan;
"PRC LAW" all the laws, regulations and decisions made and promulgated
by any PRC legislature, and all the administrative
regulations, rules and measures and other official documents
legally binding (on the parties hereto);
"REGISTRATION" any legal registration with relevant PRC authorities upon the
application in accordance with the PRC Law, including without
limitations the registration with relevant administration for
industry and commerce for the establishment and change of the
FIEs;
"SHARES" the equity interests which investor holds by contributing to
the registered capital of the company or purchasing or
otherwise lawfully acquiring the capital contribution from the
original investor of the company. The percentage of the equity
shares held by a shareholder in the company shall be equal to
his or her proportionate contribution to the registered
capital of the company.
ARTICLE II OPTION
2.1 Party A hereby irrevocably grants Party B the Option, after which Party B
shall have the right to purchase from Party A 1% of the total issued and
outstanding shares of Tech JV and 20% of the total issued and outstanding
shares of AdCo held by Party A.
2.2 Subject to the PRC Law, Party B and/or a company or person designated by
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Party B shall have the right to exercise the Option under the terms and
conditions of this Agreement at any time during the term of this Agreement
to acquire from Party A 1% of the total issued and outstanding shares of
Tech JV and 20% of the total issued and outstanding shares of AdCo.
2.3 Upon the request of Party B and/or a company or person designated by Party
B to exercise the Option, Party A is obligated to transfer the Shares to
Party B and/or the company or person designated by Party B.
ARTICLE III PRICE
3.1 Party A and Party B hereof agree that, for the Option granted by Party A
and for the 1% of the total issued and outstanding shares of Tech JV and
20% of the total issued and outstanding shares of AdCo acquired from Party
A, Party B will pay Party A in the total amount of RMB1.2 Million as a
consideration.
3.2 Party B and/or the company or person designated by Party B exercise all
the Option, and acquire 1% of the total issued and outstanding shares of
Tech JV and 20% of the total issued and outstanding shares of AdCo from
Party A. Regarding the foresaid share transfer, Tech JV and AdCo shall
have gone through the formalities of approval and registration. Within
five (5) days following the issuance of a new Approval Certificate and a
Business License for Enterprise Legal Person from the approval and
registration authorities (or the issuance of relevant approval and
registration certificates by the authority in charge of the exercise of
the Option), Party B shall deliver the full payment as stipulated in
Article 3.1 hereof in a lump sum.
ARTICLE IV EXERCISE OF OPTION
4.1 Party A and Party B hereof agree that no entity or person other than Party
B and/or the company or person designated by Party B shall have the right
to exercise the Option.
4.2 Party B and/or the company or person designated by Party B shall have the
right to exercise the Option by the means as permitted by law at any time
after this Agreement becomes effective.
4.3 Subject to the PRC Law, Party B and/or the company or person designated by
Party B shall be entitled to exercise the Option in whole or in part, and
on one or more occasions pursuant to this Agreement.
4.4 When Party B and/or the company or person designated by Party B decides to
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exercise the Option, it shall issue to Party A an OPTION NOTICE (which
form is attached as Appendix 2). Once the Option Notice is issued, Party A
shall transfer to Party B and/or the company or person designated by Party
B the Shares as stipulated on the Option Notice pursuant to this Agreement
and the Option Notice.
4.5 Party A shall, within 60 days following the issuance of the Option Notice,
assist Party B and/or the company or person designated by Party B to
assist Party B and/or the company or person designated by Party B in
completing all the Approval and the Registration procedures necessary for
the transfer of the Shares from Party A to Party B and/or the company or
person designated by Party B.
ARTICLE V REPRESENTATIONS AND WARRANTIES
5.1 Party A hereof represents and warrants to Party B and/or the company or
person designated by Party B that as at the date of this Agreement and at
the time when Party B and/or the company or person designated by Party B
exercises the Option in accordance with this Agreement:
5.1.1 Party A is a limited liability company organized and existing under
the PRC Law;
5.1.2 Party A has gone through all necessary corporate procedures and has
obtained all necessary authorizations and consents for the execution
and performance of this Agreement;
5.1.3 Party A has paid up all its proportionate capital contribution in
Tech JV and AdCo and Party A owns 1% of the total issued and
outstanding equity interest in Tech JV and 20% of the total issued
and outstanding equity interest in AdCo, and Party B has no
obligation to contribute any contributions to Tech JV or AdCo after
Party B acquires the Shares;
5.1.4 Party A represents and warrants that, the Shares it owns in Tech JV
and AdCo are free from any option, pledge, or any other security
interests or encumbrance with the same legal effect, or any
undertakings or obligations of the foresaid encumbrance, and no
option, pledge, or any other security interests or encumbrance with
the same legal effect, or any undertakings or obligations of the
foresaid encumbrance may be set on such Shares Party B's written
consent; and without Party B's written consent, Party A shall not
transfer any of the Shares it owns in Tech JV or AdCo to any third
party;
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51.5 the execution and performance of this Agreement will not cause Party
A to violate any of its obligations in any legal binding documents
that Party A is a party, or constitutes a violation of the PRC Law
and/or any injunction or order or decree of any court, arbitration
tribunal or administrative agency; and
5.1.6 no litigation, arbitration, governmental investigation, penalty or
other similar material events is pending upon or is threatened to be
initiated against Party A, which has or would have an adverse effect
upon the matters stipulated hereof.
5.2 Party B hereof represents and warrants to Party A that as at the date of
this Agreement:
5.2.1 Party B is a limited liability company organized and existing under
the laws of the British Virgin Islands; and
5.2.2 the execution and performance of this Agreement will not cause Party
B to violate any of its obligations in any legal binding documents
that Party B is a party, or constitutes a violation of any
injunction or order or decree of any court, arbitration tribunal or
administrative agency.
ARTICLE VI INDEMNITY
6.1 If Party B hereto discovers, after the Shares have been transferred to
Party B and/or the company or person designated by Party B in accordance
with this Agreement, that any of the representations and warranties made
by Party A under this Agreement is false or inaccurate, then Party B has
the right to request Party A to correct or cure the false or inaccurate
circumstance so that the non-conforming circumstance is consistent with
the applicable representations and warranties hereof. In the event that
Party A is unable to correct or cure such non-conforming circumstance by
then, Party B shall have the right to cure the foresaid situation and any
costs and expenses incurred shall be borne by Party A, and Party A shall
also be liable for any and all losses and costs that Party B and/or the
company or person designated by Party B has suffered in connection with or
arising from the aforementioned false or inaccurate representation and/or
warranties made by Party A.
6.2 If any party hereto defaults or violates any of its obligations hereof,
the defaulting party shall compensate the non-defaulting party for any
loss incurred or suffered by the non-defaulting party in connection with
or arising from the aforementioned defaults or violations.
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ARTICLE VII CONFIDENTIALITY
7.1 Unless otherwise stipulated hereof, Party A and Party B shall use their
best endeavors to keep the following information in confidential, (1) any
business information in connection with the other party which was obtained
from the execution and performance of this Agreement, (2) any contents
hereof and (3) matters in connection with any potential cooperation the
parties may have. Any Party hereof shall limit its employees, agents and
others to obtain the foresaid information only when it is necessary to
perform the responsibilities and obligations of this Agreement.
7.2 Parties hereof shall cause its directors, officers and other employees and
the directors, officers and other employees of any of its affiliates to
abide by this clause.
ARTICLE VIII FORCE MAJEURE EVENT
8.1 Force Majeure Event shall refer to any uncontrollable, unforeseeable or
unpreventable event of either party or both parties hereof, occurred after
the date of this Agreement, which caused any party hereof unable to
perform all or part of this Agreement, including without limitation
explosion, fire, flood, earthquake, or other God act, and war, riots, or
government act.
8.2 In the event of occurrence of Force Majeure Event, the party affected by
the event shall promptly notify the other party without any delay and
shall, within fifteen (15) days of the occurrence of the Force Majeure
Event, provide a detailed report evidencing the same. The party affected
by the Force Majeure Event shall take all appropriate means to eliminate
the effect of the Force Majeure Event or minimize the loss to the other
party. Both parties shall decide to postpone or terminate the performance
of the Agreement, or waive part or all obligations and responsibilities of
the affected party based on the effect of the Force Mejeure Event.
ARTICLE IX GOVERNING LAW
9.1 The execution, effectiveness, interpretation and performance of this
Agreement and the disputes resolution in connection with this Agreement
shall be governed by the PRC Law.
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ARTICLE X DISPUTES RESOLUTION
10.1 All disputes arising from or in connection with this Agreement shall be
resolved through friendly consultation between both parties hereof. If
such dispute has not been settled within thirty (30) days after the
consultation, either party may submit the dispute to China International
Economic and Trade Arbitration Commission ("CIETAC") in Beijing for
arbitration in accordance with then effective arbitration rules of CIETAC.
The arbitration award shall be final and binding upon both parties hereto.
10.2 CIETAC as stipulated in Article 10.1 shall decide on which party bears the
arbitration costs.
10.3 During the disputes, both parties hereto shall continue to perform the
duties and obligations under this Agreement not the subject of the
disputes.
ARTICLE XI EFFECTIVENESS
11.1 This Agreement shall become effective upon the date when the respective
authorized representative of Party A and Party B executes and signs on
this Agreement. The term of this Agreement is ten (10) years. Upon a
written agreement between both parties, this term may be extended
afterwards.
ARTICLE XII NOTICE
12.1 Any notice made under this Agreement shall be delivered to the other party
by hand, facsimile or registered airmail. Seven (7) days of the postmark
shall be deemed to be the date of the receipt if delivered by airmail, and
the date of the delivery of a notice if delivered by hand. In the event
that the notice is sent by facsimile, after the notice is sent by
facsimile, the original copy shall be delivered to the other party by
registered airmail or by hand.
ARTICLE XIII LANGUAGE, COUNTERPARTS AND MISCELLANEOUS
13.1 This Agreement may not be changed, modified or amended in any way except
by a written agreement agreed and signed by both parties.
13.2 In the event that any provision under this Agreement becomes ineffective,
invalid or otherwise unenforceable, the effectiveness, validity and
enforceability of other provisions hereunder shall not be affected or
otherwise damaged, provided that both parties hereto shall immediately
cease the performance of such ineffective, invalid or unenforceable
provision, and correct
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such provision, to the extend that such correction is the most close to
the original intent of such provision, until such provision becomes
effective, valid and enforceable.
13.3 This Agreement shall be written in two (2) counterparts in Chinese, one
(1) for Party A and one (1) for Party B.
13.4 Party A and Party B shall cause their respective authorized representative
to execute and sign on this Agreement as of the day and year first above
written.
PARTY A
BEIJING XXXX XXXXX SI JIN ADVERTISING COMPANY LIMITED
By:__________________________
Name: Xxxx Xxx
PARTY B
00XXX.XXX INC.
By:______________________
Name: Xxxx Xxx
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APPENDIX I CONFIRMATION LETTER
To: Beijing Xxxx Xxxxx Si Jin Advertising Company Limited ("Party A")
00xxx.xxx Inc. ("Party B")
Whereas, Party A and Party B has executed and signed on the Call Option
Agreement, in which Party A grants to Party B and/or the company or person
designated by Party B the option to acquire 20% equity interest in Shanghai
Qianjin Culture Communication Communication Company Limited ("AdCo") owned by
Party A ("Option"), and we, Qianjin Network Information Technology (Shanghai)
Company Limited as a shareholder holding 80% equity interests in AdCo hereof
confirm the following:
1. we agree that Party A grants to Party B and/or the company or person
designated by Party B the option to acquire 20% equity interests in
AdCo;
2. in the event that Party B exercises or designates other company or
person rather than us to exercise the Option, we hereby waive the
first right of refusal;
3. if, when Party B exercises the Option, the PRC Law requires Party B
to hold at least 25% equity interests in AdCo, then we hereof agree
transfer part of the equity interests we owned in AdCo to satisfy
such requirement;
4. we hereof undertakes that, in order to adjust the equity ratio of
all shareholders in AdCo, we will sign share transfer agreements and
other documents with Party B and/or other company or person
designated by Party B who exercise the Option;
5. we will use our best efforts to cause AdCo to obtain any approval
from the relevant PRC authorities regarding the share transfer, and
complete the registration in change at the administration for
industry and commerce; and
6. after the execution of the Option Agreement, we will not, without
Party B's written consent, (i) transfer the Shares to any third
party or impose any pledge on the Shares, or otherwise dispose the
Shares; (ii) conduct any acts or nonfeasance which may cause any
loss to the Option and/or any decrease in value of the equity
interests held by Party A; (iii) establish or otherwise cooperate
with others as a dormant partner or in a different name to establish
a company conducting same or similar business with the business of
AdCo.
Shareholder:
Qianjin Network Information Technology (Shanghai) Company Limited
Date:
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APPENDIX II OPTION NOTICE
To: Beijing Xxxx Xxxxx Si Jin Advertising Company Limited
To Whom It May Concern:
In accordance with the Call Option Agreement entered into by and between Beijing
Xxxx Xxxxx Si Jin Advertising Company Limited and us, 00xxx.xxx Inc., we hereof
inform that we decide to exercise / designate [ ] to exercise [all] or [(__)%
of] the Option.
00xxx.xxx Inc.
By: ________________________
Authorized representative:
Title:
Date:
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AMENDMENT TO CALL OPTION AGREEMENT
Beijing Xxxx Xxxxx Si Jin Advertising Company Limited ("Party A") and 00xxx.xxx
Inc. ("Party B") made and entered into the Call Option Agreement ("Option
Agreement") on August 1, 2002 and the Supplement to Call Option Agreement
("Supplemental Agreement") on May 3, 2004. Party A and Party B hereto agree to
enter this agreement as an amendment to the Option Agreement and the
Supplemental Agreement ("Amendment Agreement") as of May 3, 2004, as follows:
1. Article 3.1 of the Option Agreement provided that "Party A and Party B
hereof agree that, for the Option granted by Party A and for the 1% of the
total issued and outstanding shares of Tech JV and 20% of the total issued
and outstanding shares of AdCo acquired from Party A, Party B will pay
Party A in the total amount of RMB1.2 Million as consideration"
The Parties hereby agree that the above provision should be amended as:
"Party A and Party B hereof agree that, for the Option granted by Party A
and for the 1% of the total issued and outstanding shares of Tech JV and
20% of the total issued and outstanding shares of AdCo acquired from Party
A, Party B will pay Party A an aggregate amount of RMB1.2 Million as
consideration. If Party B and/or its designated company or individual
fails to obtain the approval to acquire the foresaid shares at such price
under the then applicable PRC laws, the Parties agree that Party B and/or
its designated company or individual will purchase the foresaid shares at
the lowest price to the extent permitted by the then applicable PRC laws."
2. Other provisions under the Option Agreement and the Supplemental Agreement
shall remain effective.
3. This Amendment Agreement is a part of the Option Agreement and the
Supplemental Agreement and shall have the same legal effect.
4. This Amendment Agreement becomes effective upon the day of execution by
the respective authorized representative of Party A and Party B.
Party A: Beijing Xxxx Xxxxx Si Jin Advertising Company Limited
By: ______________________________
Name:
Title:
Party B: 00xxx.xxx Inc.
By: ______________________________
Name:
Title:
SUPPLEMENT TO CALL OPTION AGREEMENT
Beijing Xxxx Xxxxx Si Jin Advertising Company Limited ("Party A") and 00xxx.xxx
Inc. ("Party B") made and entered into the Call Option Agreement ("Option
Agreement") on August 1, 2002. Party A and Party B hereto agree to enter this
agreement as a supplement to the Option Agreement ("Supplemental Agreement") as
follows:
1. Party A agrees to grant Party B and/or the company or individual
designated by Party B the option to purchase all the equity interest held
by Party A in the following companies: (i) 30% equity interest in Wuhan
Xxx Xxx Xxxx Xxxxx Advertising Company Limited, (ii) 10% equity interest
in each of the following companies: Dalian Xxx Xxx Xxxx Xxxxx Advertising
Company Limited, Hangzhou Xxx Xxx Advertising Company Limited, Chongqing
Xxxx Xxxxx Wu You Advertising Company Limited, Kunming Xxx Xxx Xxxx Xxxxx
Advertising Company Limited, Shanghai Cheng An Human Resources Company
Limited, Shanghai Wang Cai Trading Company Limited, and Hefei Wu You
Culture Communication Company Limited, (iii) all equity interest to be
held by Party A in any entities which Party A may establish in the future.
2. Party A and Party B hereto agree that the price to be paid by Party B
and/or the company or individual designated by Party B in consideration of
the equity interest set forth in clause 1 above shall be the lowest price
permitted under the laws.
3. All the provisions under the Option Agreement shall apply to all matters
hereunder, unless otherwise provided herein.
4. Shanghai Qianjin Culture Communication Company Limited, another
shareholder of the companies listed in (1) and (2) in Clause 1 above, has
agreed to the grant of option to Party B by Party A in accordance with the
Option Agreement and this Supplemental Agreement. The confirmation issued
by Shanghai Qianjin Culture Communication Communication Company Limited is
attached hereto as Appendix A.
5. This Supplementary Agreement is a part of the Option Agreement and shall
have the same legal effect.
6. This Supplementary Agreement becomes effective upon the day of execution
by the respective authorized representative of Party A and Party B.
Party A: Beijing Xxxx Xxxxx Si Jin Advertising Company Limited
By: ______________________________
Name:
Party B: 00xxx.xxx Inc.
By: ______________________________
Name:
APPENDIX A CONFIRMATION
To: Beijing Xxxx Xxxxx Si Jin Advertising Company Limited ("Party A")
00xxx.xxx Inc. ("Party B")
Whereas, Party A and Party B entered into the Call Option Agreement on August 1,
2002, and the Supplemental Agreement on May 3, 2004 (hereinafter referred to
collectively as the "Agreement"), whereby Party A grants Party B and/or the
company or individual designated by Party B the option to purchase all the
equity interest held by Party A in the following companies: (i) 30% equity
interest in Wuhan Xxx Xxx Xxxx Xxxxx Advertising Company Limited, (ii) 10%
equity interest in each of the following companies: Dalian Xxx Xxx Xxxx Xxxxx
Advertising Company Limited, Hangzhou Xxx Xxx Advertising Company Limited,
Chongqing Xxxx Xxxxx Wu You Advertising Company Limited, Kunming Xxx Xxx Xxxx
Xxxxx Advertising Company Limited, Shanghai Cheng An Recruitment Services
Company Limited, Shanghai Wang Cai Trading Company Limited, and Hefei Wu You
Culture Communication Company Limited, and (iii) all equity interest to be held
by Party A in any entities which Party A may establish in the future.
NOW, THEREFORE, as the shareholder of the foresaid companies ("Subsidiaries")
listed in Items (1) and (2) above, we, Shanghai Qianjin Culture Communication
Company Limited hereof confirm the following:
1. we agree to the grant of the foresaid option by Party A to Party B and/or
the company or individual designated by Party B;
2. in the event that Party B exercises or designates other company or
individual other than us to exercise the option, we hereby waive the first
right of refusal to purchase such equity interest;
3. we hereby undertake that, in order to adjust the equity ratio of the
shareholders in such Subsidiaries, we will enter into share transfer
agreements and other documents with Party B and/or other company or
individual designated by Party B who exercise the option;
4. we will use our best efforts to cause such Subsidiaries to obtain the
approval of relevant PRC authorities regarding the share transfer, and
complete the registration procedures for any change with the
administration for industry and commerce; and
5. we will not, without Party B's written consent, (i) transfer the equity
interest to any third party or create any pledge on the equity interest,
or otherwise dispose of the equity interest; (ii) conduct any acts or
omissions which may hamper the option and/or decrease the value of the
equity interest held by Party A.
Shareholder: Shanghai Xxxx Xxx Culture Communication Company Limited
By: ______________________________
Date: May 3, 2004
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