EXHIBIT 10.6
Private and Confidential Execution
Copy
PROXY AGREEMENT
Regarding
Shareholders' Voting Rights
In
Shanghai T2 Entertainment Co., Ltd.
among
T2CN Information Technology (Shanghai) Co., Ltd.
Shanghai T2 Entertainment Co., Ltd.
Shanghai Newmargin Venture Capital Co., Ltd.
and
Feng Tao
November 4, 2004
FANGDA PARTNERS
Room 2202-2207, Kerry Center
1515 Nan Jing West Road
Shanghai 200040
SHAREHOLDERS' VOTING RIGHTS PROXY AGREEMENT
This Shareholders' Voting Rights Proxy Agreement (hereinafter this "Agreement")
is entered into in Shanghai of the People's Republic of China (hereinafter
"PRC") as of November 4, 2004 by and among the following Parties:
(1) T2CN Information Technology (Shanghai) Co., Ltd. (hereinafter the
"Wholly-Owned Company") Registered Address: Suite 22301-526, Pudong Software
Park, 498 Guo Shoujing Road, Pudong New District, Shanghai Legal
Representative: Teng Jun-Tse
(2) Shanghai T2 Entertainment Co., Ltd., (hereinafter "T2 Entertainment")
Registered Address: 5th Floor 88 Qinjiang Road, Xuhui District, Shanghai
Legal Representative: Feng Tao
(3) Shanghai Newmargin Venture Capital Co., Ltd. (hereinafter "Shanghai
Newmargin") Registered Address: 99 Yinqiao Road, Pudong New District,
Shanghai
Legal Representative: Dong Yeshun
(4) Feng Tao
Domicile: Building 3 Xingguo Hotel, 78 Xingguo Road, Shanghai
Identity Card Number: 310106670509323
(Shanghai Newmargin and Feng Tao hereinafter are individually and collectively
referred to as the "Shareholder(s)")
WHEREAS:
1. The Shareholders are currently the only shareholders of T2 Entertainment,
legally holding all the equity in T2 Entertainment;
2. The Shareholders intend to severally entrust Wholly-Owned Company with the
exercises of their voting rights in T2 Entertainment while Wholly-Owned
Company is willing to accept such entrustment.
The Parties hereby have reached the following agreement upon mutual
consultations:
Article 1 Voting Rights Entrustment
1.1 The Shareholders hereby irrevocably entrust Wholly-Owned Company with the
full exercise of the following rights respectively enjoyed by them as
shareholders of T2 Entertainment in accordance with the then effective
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articles of association of T2 Entertainment (collectively the "Entrusted
Rights"):
(1) Attending shareholders' meetings of T2 Entertainment as proxy for the
Shareholders;
(2) Exercising on behalf of the Shareholders voting rights on all issues
required to be discussed and resolved by the shareholders' meeting;
(3) Proposing to convene interim shareholders' meetings; and
(4) Other voting rights of Shareholders under the articles of association of
T2 Entertainment (including such other voting rights of Shareholders as
provided after amendment to such articles of association).
1.2 The Shareholders acknowledge and assume relevant liabilities for any legal
consequences of Wholly-Owned Company's exercise of the foregoing Entrusted
Rights.
1.3 The Shareholders hereby acknowledge that Wholly-Owned Company needs no
advice from the Shareholders prior to its exercise of the foregoing
Entrusted Rights. However, Wholly-Owned Company 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,
Wholly-Owned Company is entitled to know the information with regard to T2
Entertainment's operation, business, clients, finance, staff, etc., and
shall have access to relevant materials of T2 Entertainment. T2
Entertainment shall adequately cooperate with WFIE Company in this regard.
Article 3 Exercise of Entrusted Rights
3.1 Wholly-Owned Company may appoint by itself or entrust its particular
personnel (one person or more) with the exercise of any or all Entrusted
Rights to the extent as agreed in Article 1 hereof. The Shareholders
acknowledge and agree to assume relevant legal consequences of such
entrustment.
3.2 The Shareholders will provide adequate assistance to the exercise of the
Entrusted Rights of Wholly-Owned Company, including execution of the
resolutions of the shareholders' meeting of T2 Entertainment or other
pertinent legal documents made by Wholly-Owned Company 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
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any reason except for default of any Shareholder or T2 Entertainment, the
Parties shall immediately seek a most similar substitute for the provision
unenforceable 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 Wholly-Owned Company shall not be requested to
be liable for or compensate (by money or otherwise) other Parties or any
third party due to its exercise of Entrusted Rights under this Agreement.
4.2 T2 Entertainment and the Shareholders agree to compensate Wholly-Owned
Company for and hold it harmless against all losses incurred or likely to
be incurred by it due to its exercise of the Entrusted Rights, 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 T2 Entertainment will not compensate for
losses incurred due to misconduct or gross negligence of Wholly-Owned
Company.
Article 5 Representations and Warranties
5.1 Each of the Shareholders hereby severally and jointly with the other
Shareholder represents and warrants that:
5.1.1 Feng Tao is a PRC citizen with full capacity 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;
5.1.2 Shanghai Newmargin is a limited liability corporation duly
incorporated and validly existing under the PRC laws; it has
independent status as a legal person; it has full and independent
legal status and capacity to execute, deliver and perform this
Agreement and can independently be one litigant party.
5.1.3 Each of them has full right and authorization to execute and
deliver this Agreement and other documents that are related to
the transaction stipulated in this Agreement and to be executed
by them. They have full right and authorization with respect to
completing the transaction stipulated in this Agreement.
5.1.4 This Agreement shall be executed and delivered by the
Shareholders lawfully and properly. This Agreement constitutes
the legal and binding obligations on them and is enforceable on
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them in accordance with its terms and conditions hereof.
5.1.5 The Shareholders are enrolled and legal Shareholders of T2
Entertainment as of the effective date of this Agreement, and
except the rights created by this Agreement, the Equity Pledge
Agreement entered into by them and Wholly-Owned Company, and the
Exclusive Equity Transfer Call Agreement entered into by them and
T2 Entertainment and T2CN Holding Limited (a limited liability
corporation incorporated under British Virgin Islands laws) as of
November 4, 2004 (hereinafter "Call Agreement"), there exists no
third party rights on the Entrusted Rights. Pursuant to this
Agreement, Wholly-Owned Company is able to completely and
sufficiently exercise the Entrusted Rights in accordance with the
then effective articles of association of T2 Entertainment.
5.2 Wholly-Owned Company and T2 Entertainment hereby severally represents and
warrants that:
5.2.1 each of them is a company with limited liability properly
registered and legally existing under the PRC laws, with an
independent corporate legal person status, and has 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 each of them has the full company 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.
5.3 T2 Entertainment further represents and warrants that the Shareholders are
the only enrolled and legal shareholders of T2 Entertainment as of the
effective date of this Agreement. Pursuant to this Agreement, Wholly-Owned
Company is able to completely and sufficiently exercise the Entrusted
Rights in accordance with the then effective articles of association of T2
Entertainment.
Article 6 Term of Agreement
6.1 This Agreement takes effect from the date of due execution of all the
Parties hereto, and shall maintain its effect indefinitely as long as any
of the Shareholders remains as a shareholder of T2 Entertainment, unless
terminated by written agreement of all the Parties.
6.2 Subject to Article 6.3 below, in case a Shareholder transfers all of the
equity held by it in T2 Entertainment with prior consent of Wholly-Owned
Company, such Shareholder shall no longer be a Party to this Agreement
whilst the obligations and commitments of the other Parties under this
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Agreement shall not be adversely affected thereby.
6.3 Except for transferring equity according to Call Agreement, in case that
any party of the Shareholders transfers its equity in T2 Entertainment to a
third party, such party shall obtain written consent from Wholly-Owned
Company and provide Wholly-Owned Company with written undertaking letter
issued by transferee undertaking to fulfil all the obligations applying to
the transferor under this Agreement.
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
telex, 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.
Article 8 Default Liability
8.1 The Parties agree and confirm that, if any of the Parties (hereinafter 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
(hereinafter a "Default"). In such event any of the other Parties without
default (a "Non-defaulting Party") shall have the right to require the
Defaulting Party to rectify such Default or take remedial measures within a
reasonable period. If the Defaulting Party fails to rectify such Default or
take remedial measures within such reasonable period or within ten (10)
days of a Non-defaulting Party's notifying the Defaulting Party in writing
and requiring it to rectify the Default, then (1) Wholly-Owned Company
shall be entitled to terminate this Agreement and require the Defaulting
Party to indemnify damages in case the Defaulting Party is a Shareholder or
T2 Entertainment, or (2) the Non-defaulting Party is entitled to require
the Defaulting Party to indemnify damages in case such Defaulting Party is
Wholly-Owned Company. The Shareholders or T2 Entertainment shall in no
circumstance be entitled to terminate or cancel this Agreement or the trust
hereunder.
8.2 The rights and remedies set out herein shall be cumulative, and shall not
preclude any other rights or remedies provided by law.
8.3 Notwithstanding any other provisions herein, the validity of this Article
shall stand disregarding the suspension or termination of this Agreement.
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Article 9 Miscellaneous
9.1 This Agreement shall be prepared in Chinese language in four (4) 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, and if the Parties 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 Parties.
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 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 (hereinafter 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 Any amendments or supplements to this Agreement shall be made in writing
and shall take effect only when properly signed by the Parties to this
Agreement.
9.9 No Party shall assign any of its rights and/or transfer any of its
obligations hereunder to any third parties without prior written consent
from other Parties.
9.10 This Agreement shall be binding on the legal successors of the Parties.
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[Execution Page]
IN WITNESS HEREOF, the following Parties have caused this Shareholders' Voting
Rights Proxy Agreement to be executed as of the date and at the place first
above mentioned.
T2CN Information Technology (Shanghai) Co., Ltd.
(Company chop)
Signature: /s/ Jun-Tse Teng
-------------------------------------
Name:
Position: Authorized Representative
Shanghai T2 Entertainment Co., Ltd.
(Company chop)
Signature: /s/ Tao Feng
-------------------------------------
Name:
Position: Authorized Representative
Shanghai Newmargin Venture Capital Co., Ltd.
(Company chop)
Signature: /s/ Tao Feng
-------------------------------------
Name:
Position: Authorized Representative
Feng Tao
Signature: /s/ Tao Feng
-------------------------------------