Unassociated Document


     

    
      Exhibit
4.60

    

    

      EXECUTION
VERSION


       

      
        

        

      

       

      SHARE
PURCHASE AGREEMENT

       

      by
and among

      


      KONGZHONG
CORPORATION,

      


      SHANGHAI
DACHENG NETWORK TECHNOLOGY CO., LTD.,

      


      ZHEN
YANG,

      


      LEILEI
WANG,

      


      XIAOLONG
LI,

      


      TONG
ZHANG,

      


      and

      


      TIANSHU
WU

       

      Dated
as of December 15, 2009

    

    
      
 

      
        

        

      

      
        
           


        

        
           


          
            

          

        

        
           


        

      


      TABLE OF
CONTENTS

       

      
        
          
            
              
                	 	
                        Page

                      
	
                        ARTICLE
      I

                      	
                         
      

                      
	 
      	 
      
	
                        DEFINITIONS
      AND TERMS

                      	 
      
	 
      	 
      	 
      
	
                        Section
      1.1

                      	
                        Definitions

                      	
                        1

                      
	
                        Section
      1.2

                      	
                        Other
      Defined Terms

                      	
                        9

                      
	
                        Section
      1.3

                      	
                        Interpretation
      and Rules of Construction

                      	
                        10

                      
	 
      	 
      
	
                        ARTICLE
      II

                      	 
      
	 
      	 
      
	
                        SALE
      AND PURCHASE

                      	 
      
	 
      	 
      	 
      
	
                        Section
      2.1

                      	
                        Sale
      and Purchase

                      	
                        11

                      
	
                        Section
      2.2

                      	
                        Purchase
      Price and Payments

                      	
                        11

                      
	
                        Section
      2.3

                      	
                        Closing

                      	
                        13

                      
	 
      	 
      
	
                        ARTICLE
      III

                      	 
      
	 
      	 
      
	
                        REPRESENTATIONS
      AND WARRANTIES OF THE SELLERS AND THE COMPANY

                      	 
      
	 
      	 
      
	
                        Sub-Article
      A

                      	 
      
	
                        Representations
      and Warranties of the Sellers

                      	 
      
	 
      	 
      	 
      
	
                        Section
      3.1

                      	
                        Authorization
      of Transaction; Binding Obligation

                      	
                        14

                      
	
                        Section
      3.2

                      	
                        Non-Contravention

                      	
                        15

                      
	
                        Section
      3.3

                      	
                        Title
      to the Offshore Company Shares

                      	
                        15

                      
	
                        Section
      3.4

                      	
                        U.S.
      Securities Laws

                      	
                        15

                      
	 
      	 
      
	
                        Sub-Article
      B

                      	 
      
	
                        Representations
      and Warranties of the Sellers and the Company

                      	 
      
	 
      	 
      	 
      
	
                        Section
      3.5

                      	
                        Authorization
      of Transaction; Binding Obligation

                      	
                        15

                      
	
                        Section
      3.6

                      	
                        Organization

                      	
                        16

                      
	
                        Section
      3.7

                      	
                        Non-Contravention

                      	
                        16

                      
	
                        Section
      3.8

                      	
                        Governmental
      Approvals and Third Party Consents

                      	
                        16

                      
	
                        Section
      3.9

                      	
                        Company
      Equity Interests

                      	
                        16

                      
	
                        Section
      3.10

                      	
                        Financial
      Information

                      	
                        17

                      
	
                        Section
      3.11

                      	
                        No
      Undisclosed Indebtedness

                      	
                        18

                      
	
                        Section
      3.12

                      	
                        Taxes

                      	
                        18

                      
	
                        Section
      3.13

                      	
                        Litigation,
      Compliance and Governmental Authorizations

                      	
                        19

                      
	
                        Section
      3.14

                      	
                        Employee
      Benefits

                      	
                        20

                      
	
                        Section
      3.15

                      	
                        Labor

                      	
                        21

                      


              

            

          

        

      

       

      
        
           


        

        
          - i -

          
            

          

        

        
           


        

      
 

      
        
          
            
              
                	
                        Section
      3.16

                      	
                        Real
      Property

                      	
                        21

                      
	
                        Section
      3.17

                      	
                        Intellectual
      Property

                      	
                        22

                      
	
                        Section
      3.18

                      	
                        Material
      Contracts

                      	
                        23

                      
	
                        Section
      3.19

                      	
                        Environment

                      	
                        25

                      
	
                        Section
      3.20

                      	
                        Affiliate
      Transactions

                      	
                        25

                      
	
                        Section
      3.21

                      	
                        [Reserved]

                      	
                        25

                      
	
                        Section
      3.22

                      	
                        Anti-Bribery
      Laws

                      	
                        25

                      
	
                        Section
      3.23

                      	
                        OFAC

                      	
                        26

                      
	
                        Section
      3.24

                      	
                        Brokers

                      	
                        26

                      
	
                        Section
      3.25

                      	
                        Sufficiency
      of Assets

                      	
                        26

                      
	
                        Section
      3.26

                      	
                        No
      Solicitation

                      	
                        26

                      
	
                        Section
      3.27

                      	
                        Full
      Disclosure

                      	
                        26

                      
	 
      	 
      
	
                        Sub-Article
      C

                      	 
      
	
                        Representations
      and Warranties in Respect of the WFOE, the Hong Kong Company and the
      Offshore Company

                      	 
      
	 
      	 
      	 
      
	
                        Section
      3.28

                      	
                        Certain
      Representations and Warranties

                      	
                        27

                      
	
                        Section
      3.29

                      	
                        Authorization
      of Transaction

                      	
                        27

                      
	
                        Section
      3.30

                      	
                        Organization

                      	
                        27

                      
	
                        Section
      3.31

                      	
                        Non-Contravention

                      	
                        27

                      
	
                        Section
      3.32

                      	
                        Governmental
      Approvals and Third Party Consents

                      	
                        28

                      
	
                        Section
      3.33

                      	
                        Equity
      Interests

                      	
                        28

                      
	
                        Section
      3.34

                      	
                        No
      Other Representation or Warranty

                      	
                        29

                      
	 
      	 
      
	
                        ARTICLE
      IV

                      	 
      
	 
      	 
      
	
                        REPRESENTATIONS
      AND WARRANTIES OF THE PURCHASER

                      	 
      
	 
      	 
      	 
      
	
                        Section
      4.1

                      	
                        Organization

                      	
                        29

                      
	
                        Section
      4.2

                      	
                        Authorization
      of Transaction; Binding Obligation

                      	
                        30

                      
	
                        Section
      4.3

                      	
                        Non-Contravention

                      	
                        30

                      
	
                        Section
      4.4

                      	
                        Governmental
      Approvals

                      	
                        30

                      
	
                        Section
      4.5

                      	
                        Litigation

                      	
                        30

                      
	
                        Section
      4.6

                      	
                        Validity
      of Issuance

                      	
                        30

                      
	
                        Section
      4.7

                      	
                        SEC
      Reports

                      	
                        31

                      
	
                        Section
      4.8

                      	
                        Nasdaq

                      	
                        31

                      
	
                        Section
      4.9

                      	
                        Brokers

                      	
                        31

                      
	
                        Section
      4.10

                      	
                        No
      Other Representation and Warranty

                      	
                        31

                      
	 
      	 
      
	
                        ARTICLE
      V

                      	 
      
	 
      	 
      
	
                        COVENANTS

                      	 
      
	 
      	 
      	 
      
	
                        Section
      5.1

                      	
                        Operations,
      etc

                      	
                        31

                      
	
                        Section
      5.2

                      	
                        Escrow
      Arrangements

                      	
                        34

                      
	
                        Section
      5.3

                      	
                        Offshore
      Reorganization

                      	
                        35

                      


              

            

          

        

      

       

      
        
           


        

        
          - ii -

          
            

          

        

        
           


        

      
 

      
        
          
            	
                    Section
      5.4

                  	
                    Nasdaq
      Confirmation; Shareholder Approval Matters

                  	
                    35

                  
	
                    Section
      5.5

                  	
                    Compliance
      with U.S. Securities Laws

                  	
                    36

                  
	
                    Section
      5.6

                  	
                    Post-Closing
      Operations

                  	
                    36

                  
	
                    Section
      5.7

                  	
                    Cooperation;
      Approvals and Consents; Notification

                  	
                    37

                  
	
                    Section
      5.8

                  	
                    Access
      to Information

                  	
                    37

                  
	
                    Section
      5.9

                  	
                    Confidentiality

                  	
                    38

                  
	
                    Section
      5.10

                  	
                    Public
      Announcements

                  	
                    38

                  
	
                    Section
      5.11

                  	
                    Company
      IT Systems

                  	
                    39

                  
	
                    Section
      5.12

                  	
                    Transfer
      Restrictions

                  	
                    39

                  
	
                    Section
      5.13

                  	
                    Rule
      144 Sales

                  	
                    39

                  
	
                    Section
      5.14

                  	
                    Notice

                  	
                    40

                  
	
                    Section
      5.15

                  	
                    Transfer
      of Equity Interest

                  	
                    40

                  
	
                    Section
      5.16

                  	
                    No
      Solicitation

                  	
                    40

                  
	
                    Section
      5.17

                  	
                    Board
      of Directors

                  	
                    40

                  
	
                    Section
      5.18

                  	
                    Tax
      Matters

                  	
                    40

                  
	
                    Section
      5.19

                  	
                    Breach
      by the WFOE, the Hong Kong Company or the Offshore Company

                  	
                    40

                  
	 
      	 
      
	
                    ARTICLE
      VI

                  	 
      
	 
      	 
      
	
                    CONDITIONS
      TO CLOSING

                  	 
      
	 
      	 
      	 
      
	
                    Section
      6.1

                  	
                    Conditions
      to Obligations of the Purchaser and the Sellers

                  	
                    41

                  
	
                    Section
      6.2

                  	
                    Conditions
      to Obligations of the Purchaser

                  	
                    41

                  
	
                    Section
      6.3

                  	
                    Conditions
      to Obligations of the Sellers

                  	
                    43

                  
	 
      	 
      
	
                    ARTICLE
      VII

                  	 
      
	 
      	 
      
	
                    ACCELERATION
      OF CONTINGENT PAYMENTS

                  	 
      
	 
      	 
      	 
      
	
                    Section
      7.1

                  	
                    Acceleration
      of Contingent Payments

                  	
                    43

                  
	
                    Section
      7.2

                  	
                    Valuation
      upon Acceleration

                  	
                    43

                  
	
                    Section
      7.3

                  	
                    Termination
      for Cause

                  	
                    43

                  
	 
      	 
      
	
                    ARTICLE
      VIII

                  	 
      
	 
      	 
      
	
                    TERMINATION

                  	 
      
	 
      	 
      	 
      
	
                    Section
      8.1

                  	
                    Termination

                  	
                    44

                  
	
                    Section
      8.2

                  	
                    Effect
      of Termination

                  	
                    44

                  
	 
      	 
      
	
                    ARTICLE
      IX

                  	 
      
	 
      	 
      
	
                    INDEMNIFICATION

                  	 
      
	 
      	 
      	 
      
	
                    Section
      9.1

                  	
                    Survival
      of Representations and Warranties

                  	
                    45

                  
	
                    Section
      9.2

                  	
                    Indemnification

                  	
                    45

                  
	
                    Section
      9.3

                  	
                    Limitations
      on Indemnification

                  	
                    46

                  
	
                    Section
      9.4

                  	
                    Notice
      of Loss; Third Party Claims

                  	
                    46

                  


          

        

      

       

      
        
           


        

        
          - iii -

          
            

          

        

        
           


        

      
 

      
        
          
            	
                    Section
      9.5

                  	
                    Mitigation;
      Adjustments

                  	
                    48

                  
	
                    Section
      9.6

                  	
                    Payments

                  	
                    49

                  
	
                    Section
      9.7

                  	
                    Exclusive
      Remedy

                  	
                    49

                  
	 
      	 
      
	
                    ARTICLE
      X

                  	 
      
	 
      	 
      
	
                    MISCELLANEOUS

                  	 
      
	 
      	 
      	 
      
	
                    Section
      10.1

                  	
                    Notices

                  	
                    49

                  
	
                    Section
      10.2

                  	
                    Amendments
      and Waivers

                  	
                    51

                  
	
                    Section
      10.3

                  	
                    Expenses

                  	
                    51

                  
	
                    Section
      10.4

                  	
                    Assignment

                  	
                    51

                  
	
                    Section
      10.5

                  	
                    Dispute
      Resolution

                  	
                    52

                  
	
                    Section
      10.6

                  	
                    Governing
      Law

                  	
                    53

                  
	
                    Section
      10.7

                  	
                    No
      Specific Performance

                  	
                    53

                  
	
                    Section
      10.8

                  	
                    Counterparts,
      etc

                  	
                    53

                  
	
                    Section
      10.9

                  	
                    Entire
      Agreement; Severability

                  	
                    53

                  
	
                    Section
      10.10

                  	
                    No
      Third Party Beneficiaries

                  	
                    53

                  


          

        

      

       

      
        
           


        

        
          - iv -

          
            

          

        

        
           


        

      


      Exhibits and
Schedules

       

      
        
          
            	
                    Exhibit
      A

                  	
                    List
      of Key Employees

                  
	
                    Exhibit
      B

                  	
                    Plan
      of Offshore Reorganization

                  
	
                    Exhibit
      C

                  	
                    Form
      of PRC Legal Opinion

                  
	
                    Exhibit
      D

                  	
                    Form
      of Cayman Legal Opinion

                  
	
                    Exhibit
      E

                  	
                    Forms
      of Employment and Non-Compete Agreements

                  
	
                    Schedule 2.2(a)(1)  

                  	
                    Shareholding
      in the Company

                  
	
                    Schedule
      2.2(a)(2)

                  	
                    First
      Payment

                  
	
                    Schedule
      2.3(c)(v)

                  	
                    Closing
      Deliverables by the
Sellers

                  


          

        

      

      


      Disclosure
Schedules

       

      
        Sellers
and Company Disclosure Schedule

      

      Purchaser
Disclosure Schedule


      
        
           


        

        
          - v -

          
            

          

        

        
           


        

      


      SHARE PURCHASE AGREEMENT,
dated as of December 15, 2009 (this “Agreement”), by and
among KongZhong Corporation, an exempted limited liability company incorporated
under the laws of the Cayman Islands (the “Purchaser”), Shanghai
Dacheng Network Technology Co., Ltd., a company organized under the laws of the
PRC (the “Company”), Zhen
YANG (“Shareholder
A”), Leilei WANG (“Shareholder B”),
Xiaolong LI, Tong ZHANG and Tianshu WU (each of Shareholder A, Shareholder B,
Xiaolong LI, Tong ZHANG and Tianshu WU, a “Seller”, and
collectively, the “Sellers”).

       

      RECITALS:

       

      WHEREAS,
the Sellers collectively own all of the equity interests in the Company (the
“Company Equity
Interests”);

       

      WHEREAS,
the Company is engaged in the development and operation of online
games,

       

      WHEREAS,
the Sellers desire to cause the Company to effect the Offshore Reorganization
(as defined below);

       

      WHEREAS,
upon the completion of the Offshore Reorganization, the Sellers will own all of
the issued and outstanding share capital of the Offshore Company (as defined
below) (the “Offshore
Company Shares”); and

       

      WHEREAS,
the Sellers desire to sell to the Purchaser, and the Purchaser desires to
purchase, all of the Offshore Company Shares, upon the terms and conditions set
forth herein.

       

      NOW,
THEREFORE, in consideration of the premises and of the representations,
warranties, covenants and agreements contained herein, the parties hereto hereby
agree as follows:

       

      ARTICLE
I

       

      DEFINITIONS AND
TERMS

       

      Section
1.1           Definitions.  The
following terms, as used in this Agreement, shall have the following
meanings:

       

      “2010 Financial
Statements” means the consolidated financial statements (including the
consolidated balance sheets, statements of operations, statements of
shareholders’ equity and comprehensive income and cashflow statements) of the
Offshore Company for the 2010 calendar year, prepared in accordance with US GAAP
and audited by the Auditor in accordance with the standards promulgated by the
U.S. Public Company Accounting Oversight Board.

       

      “2010 NPAT” means the
NPAT for the 2010 calendar year, as reflected in the 2010 Financial
Statements.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      “Action” means any
civil, criminal or administrative claim, action, suit, proceeding, arbitration,
controversy or investigation by or before any Governmental Authority or any
other Person acting on behalf of a Governmental Authority, whether brought by a
Governmental Authority or any other Person.

       

      “ADSs” means the
American Depositary Shares of the Purchaser, each representing forty (40)
Purchaser Ordinary Shares.

       

      “Affiliate” means,
with respect to any Person, any other Person that, directly or indirectly,
controls, is controlled by or is under common control with such Person as of the
date on which, or at any time during the period for which, the determination of
affiliation is being made.  For purposes of this definition, the term
“control”
(including the correlative meanings of the terms “controlled by” and
“under common control
with”), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and/or policies of such Person, whether through ownership of voting
securities, by Contract or otherwise.

       

      “Anti-Bribery Law”
means the U.S. Foreign Corrupt Practices Act of 1977, as amended, the
Organization for Economic Co-operation and Development Convention on Combating
Bribery of Foreign Public Officials in International Business Transactions and
related implementing legislation, the anti-bribery related provisions in the
criminal and anti-unfair competition laws of the PRC and any other applicable
anti-bribery or similar or related laws.

       

      “Auditor” means
Deloitte Touche Tohmatsu CPA Ltd., the Purchaser’s independent registered public
accounting firm, or any successor independent registered public accounting firm
engaged by the Purchaser.

       

      “Business Day” means
any day except Saturday, Sunday and any day which shall be a legal holiday or a
day on which banking institutions in the United States of America, the PRC or
Hong Kong generally are authorized or required by Law or other governmental
actions to close.

       

      “Cause” shall mean (i)
a breach by Shareholder A of his employment agreement with the Purchaser (which,
for the purpose of this definition only, shall include the Company, the WFOE,
the Hong Kong Company and the Offshore Company after the Closing) or any term of
this Agreement that has not been cured after thirty (30) days’ written notice
from the Purchaser and an opportunity to cure; (ii) the conviction or nolo contendere or equivalent
plea for a criminal offense involving fraud or dishonesty or a criminal offense
which otherwise results in financial or reputational harm to the Purchaser;
(iii) willful and repeated failure by Shareholder A to perform the duties of his
position in a competent manner, which failure continues after thirty (30) days’
written notice from the Purchaser and an opportunity to cure; (iv) failure to
comply with any written rules or policies of the Purchaser as published and
generally enforced, including, without limitation, breach of fiduciary duties to
the Purchaser, which failure continues after thirty (30) days’ written notice
from the Purchaser and an opportunity to cure; (v) any actions or omissions
constituting willful misconduct or gross negligence resulting in financial or
reputational harm to the Purchaser; (vi) any unlawful activity that constitutes
an employment disqualification under applicable Laws; (vii) violation of
applicable U.S. Securities Laws; (viii) any act or making any public statement
that impairs, impugns, denigrates, disparages or negatively reflects upon the
name, reputation or business interests of the Purchaser; (ix) any use of
confidential information received during employment with the Purchaser relating
to the business affairs of the Purchaser or any of its clients or customers, in
breach of the undertaking to keep such information confidential; or (x) direct
or indirect persuasion, or any attempt to persuade by any means, any employee of
the Purchaser to terminate his or her employment with the Purchaser or to breach
any of the terms of his or her employment with the Purchaser, in each case
without the prior written consent of the Purchaser.


      
        
           


        

        
          - 2
-

          
            

          

        

        
           


        

      

       

      “Closing Share Price”
means, with respect to each Trading Day, the closing price of the ADSs as
reported on the Nasdaq Global Select Market, after adjusting for the forty (40)
Purchaser Ordinary Shares to one ADS ratio (whereby one Purchaser Ordinary Share
shall have a deemed closing price equal to 1/40 of the ADS closing price on such
Trading Day).

       

      “Company Books and
Records” means all books, records, Contracts, documents, instruments,
ledgers, reports, plans and files related to the conduct of the businesses of
the Company and its Subsidiaries, the WFOE, the Hong Kong Company or the
Offshore Company, as applicable, in paper, electronic or other forms that are
maintained by or on behalf of the Company or any of its Subsidiaries, the WFOE,
the Hong Kong Company or the Offshore Company, as applicable.

       

      “Company IT Systems”
means the computers, software, hardware, servers of the Company and its
Subsidiaries (and
of the WFOE, the Hong Kong Company and the Offshore Company, if any) and all
other information technology equipment and all documentation related to the
foregoing.

       

      “Company Licensed
Intellectual Property” means all Intellectual Property that the Company
or any of its Subsidiaries is licensed to use in the conduct of their respective
businesses pursuant to a Contract to which the Company or any of its
Subsidiaries is a party.

       

      “Company Ordinary Course of
Business” means the ordinary course of the normal, day-to-day operations
of the Company and its Subsidiaries, the WFOE, the Hong Kong Company or the
Offshore Company, as applicable, in each case consistent with (i) the past
practices of the Company and its Subsidiaries, the WFOE, the Hong Kong Company
or the Offshore Company, as applicable, and (ii) applicable Laws.

       

      “Company Owned Intellectual
Property” means all Intellectual Property owned by the Company or any of
its Subsidiaries that is used in the conduct of the respective businesses of the
Company or any of its Subsidiaries.

       

      “Contract” means any
contract, agreement, license, note, bond, instrument, lease, conditional sale
contract, franchise, insurance policy, mortgage, indenture, commitment or other
binding agreement, whether written or oral.

       

      “Environmental Law”
means any Law relating to (i) the protection, preservation or restoration
of the environment (including air, water, soil, vapor, surface water,
groundwater, drinking water supply, surface land, subsurface land, plant and
animal life or any other natural resources) or (ii) exposure to, or the
use, storage, recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of, Hazardous Substances, in
each case as amended from time to time.


      
        
           


        

        
          - 3
-

          
            

          

        

        
           


        

      

       

      “Environmental
Liabilities” with respect to any Person, means any and all Liabilities of
or incurred by such Person or any of its Subsidiaries (including any entity
which is, in whole or in part, a predecessor of such Person or any of such
Subsidiaries), whether vested or unvested, contingent or fixed, including
contractual, which (i) arise under applicable Environmental Laws or with
respect to Hazardous Substances and (ii) relate to actions occurring or
conditions existing on or prior to the Closing Date.

       

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

       

      “First Half 2010 Financial
Statements” means the consolidated financial statements (including the
consolidated balance sheets, statements of operations, statements of
shareholders’ equity and comprehensive income and cashflow statements) of the
Offshore Company for the first six (6) months of 2010, prepared in accordance
with US GAAP and reviewed by the Auditor in accordance with the standards
promulgated by the U.S. Public Company Accounting Oversight Board.

       

      “First Half 2010 NPAT”
means the NPAT for the first six (6) months of 2010, as reflected in the First
Half 2010 Financial Statements.

       

      “Governmental
Authority” means any central, national, territorial, foreign,
international, multinational, federal, state, provincial, local, municipal,
county or other governmental, quasi-governmental, administrative or regulatory
authority, legislative, executive or judicial body, agency, court, tribunal,
commission, bureau, board, exchange or other similar entity (including any
branch or department thereof).

       

      “Governmental
Authorizations” means approvals, consents, authorizations, certificates,
verifications, filings, franchises, licenses, permits, notices, variances,
rights or similar acts or authorizations, by, with or from any Governmental
Authority.

       

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

       

      “Hazardous Substance”
means any substance listed, defined, designated or classified as hazardous,
toxic or radioactive under any applicable Environmental Law.

       

      “Hong Kong” means the
Hong Kong Special Administrative Region of the People’s Republic of
China.

       

      “Hong Kong Company”
means a limited liability company to be incorporated under
the Laws of Hong Kong, which shall be the wholly-owned Subsidiary of the
Offshore Company with no debt or other Liabilities and whose only assets are the
entire equity interests of the WFOE.


      
        
           


        

        
          - 4
-

          
            

          

        

        
           


        

      

       

      “Indebtedness” means
(i) Liabilities for borrowed money, whether contingent or funded, secured
or unsecured, and obligations evidenced by bonds, debentures, notes or similar
instruments, (ii) Liabilities for the deferred purchase price of any
property or services rendered, (iii) Liabilities in respect of any lease of
(or other arrangements conveying the right to use) real or personal property, or
a combination thereof, which Liabilities are required to be classified and
accounted for under US GAAP as capital leases,
(iv) obligations under derivative contracts (valued at the termination
value thereof) and any interest rate agreements and currency agreements and
(v) Liabilities for the reimbursement of any obligor on any letter of
credit, banker’s acceptance or similar credit transaction securing obligations
of a type described in the foregoing clause (i), (ii), (iii) or (iv) to the
extent of the obligation secured.

       

      “Indemnified Party”
means a Purchaser Indemnified Party or a Seller Indemnified Party, as the case
may be.

       

      “Indemnifying Party”
means the Sellers for the purpose of Section 9.2(a) and Section 9.2(b) or the
Purchaser for the purpose of Section 9.2(d), as the case may be.

       

      “Intellectual
Property” means all (i) trademarks, service marks, brand names,
corporate names, “doing-business-as”, Internet domain names, logos, symbols,
trade dress, trade names, other indicia of origin, and all applications or
registrations for the foregoing, and all goodwill associated therewith and
symbolized thereby, in any jurisdiction (collectively, the “Trademarks”),
(ii) inventions, discoveries and patents, applications for patents
(including divisions, continuations, continuations in part and renewal
applications), and any renewals, extensions and reissues thereof, in any
jurisdiction, (iii) trade secrets, confidential information and know-how,
including processes, schematics, business methods, formulae, drawings,
prototypes, models, designs, customer lists and supplier lists (collectively,
the “Trade
Secrets”), (iv) works of authorship (including source code,
databases and other compilations of information), and copyrights therein and
thereto, and registrations and applications therefor, in any jurisdiction, and
(v) any other intellectual property or proprietary rights, in each case to
the extent entitled to legal protection as such.

       

      “Key Employees” means
the employees of the Company set forth in Exhibit A attached hereto or
appropriate replacement of such employees in accordance with Section
5.1(c).

       

      “Knowledge” means the
knowledge, after reasonable inquiry, of: (i) with respect to each Seller,
such Seller; (ii) with respect to the Company, the head(s) of each department of
the Company and officers of the Company to whom such heads of departments
report, and the Sellers; and (iii) with respect to the Purchaser, the
executive management of the Purchaser.

       

      “Law” means any
central, national, territorial, foreign, international, multinational, federal,
state, provincial, local, municipal, county or other law, statute, code,
ordinance, treaty, rule, regulation, order, decree, judgment or ruling of any
Governmental Authority.

       

      “Liability” means any
and all debts, liabilities, commitments and obligations, whether fixed,
contingent or absolute, matured or unmatured, accrued or not accrued, determined
or determinable, secured or unsecured, disputed or undisputed. 


      
        
           


        

        
          - 5
-

          
            

          

        

        
           


        

      

       

      “Lien” means, whether
arising under Contract or otherwise, any liens, pledges, debts, retention
agreements, hypothecations, rights of others, assessments, voting trust
agreements, options, rights of first offer, rights of first refusal, tag-along
rights, drag-along rights, proxies, title defects, security interests, claims,
charges, easements, limitations, commitments, encroachments, restrictions,
mortgages, or limitations or encumbrances of any kind or nature
whatsoever.

       

      “Losses” means losses,
damages, claims, fees, fines, costs and expenses, interest, awards, settlements,
Liabilities, recourses, judgments and penalties (including reasonable fees and
expenses of counsel and other advisors).

       

      “Material Adverse
Effect” means: (i) with respect to the Sellers, the Company or its
Subsidiaries, the WFOE, the Hong Kong Company or the Offshore Company, any
event, occurrence, fact, condition, change, development or effect on the Company
or its Subsidiaries, the WFOE, the Hong Kong Company or the Offshore Company or
their respective businesses, that has or
would reasonably be expected to have, individually or in the aggregate, a
material adverse effect on the business, operations, assets (including
intangible assets), prospects, condition (financial or otherwise), properties
(including intangible properties), Liabilities or results of operations of the
Company and its Subsidiaries, taken as a whole, the WFOE, the Hong Kong Company
or the Offshore Company; and (ii) with respect to the Sellers or the Company,
any effect that would affect the legality, validity or enforceability of this
Agreement or materially impair the ability of the Sellers or the Company to
perform their respective obligations under this Agreement or to consummate the
transactions contemplated hereunder; provided that no
effect resulting from any of the following shall be considered in determining
whether there has occurred a Material Adverse Effect: (A) any facts,
circumstances, events, changes or occurrences generally affecting the online
gaming industry in which the Company or any of its Subsidiaries operates (other
than those that have or would reasonably be expected to have a disproportionate
impact on the Company or any of its Subsidiaries); (B) changes to accounting
rules applicable to the Company or any of its Subsidiaries; (C) the public
announcement of this Agreement or the consummation of the transactions
contemplated by this Agreement; (D) changes or developments in political
conditions in the PRC generally (including acts of war, declared or undeclared,
armed hostilities and terrorism) (other than those that have or would reasonably
be expected to have a disproportionate impact on the Company or any of its
Subsidiaries); and (E) disruptions in the PRC securities markets generally
(other than those that have or would reasonably be expected to have a
disproportionate impact on the Company or any of its Subsidiaries).

       

      “NPAT” means the
consolidated net profit after tax in U.S. dollars of the Offshore Company, as
calculated according to US GAAP.  Any net profits after tax in
currencies other than U.S. dollars shall be converted into U.S. dollars
according to the relevant exchange rates determined under US GAAP.

       

      “Offshore Company”
means an exempted limited liability company to be incorporated under the Laws of
the Cayman Islands, with identical shareholders and an identical shareholding
structure (including each shareholder’s percentage shareholding) as those of the
Company as of the date of this Agreement, and which shall hold the entire equity
interests of the Hong Kong Company.


      
        
           


        

        
          - 6
-

          
            

          

        

        
           


        

      

       

      “Offshore
Reorganization” means the reorganization to be effected pursuant to the
terms of the Plan of Offshore Reorganization set forth in Exhibit B attached
hereto.

       

      “Organizational
Documents” means a Person’s constitution, charter, articles of
organization, certificate of incorporation, certificate of formation, memorandum
of association, articles of association, limited liability company agreement,
partnership agreement, by-laws or other similar organizational or constituent
documents, as applicable.

       

      “Plan of Offshore
Reorganization” means the plan set forth in Exhibit B attached
hereto.

       

      “PRC” means the
People’s Republic of China, which, for purposes of this Agreement only, excludes
the Hong Kong Special Administrative Region of the People’s Republic of China,
the Macau Special Administrative Region of the People’s Republic of China and
Taiwan.

       

      “Person” means an
individual, bank, savings association, credit union, corporation (including
not-for-profit), general or limited partnership, limited liability company,
joint venture, estate, association, trust, unincorporated organization,
Governmental Authority or other entity of any kind or nature.

       

      “Public Official”
means an employee of a Governmental Authority, a member or official of a
political party, a political candidate, an officer of a public international
organization, or an officer, employee or representative of a PRC state-owned
enterprise.

       

      “Purchaser Disclosure
Schedule” means the disclosure schedule attached hereto, dated as of the
date hereof, delivered by the Purchaser to the Sellers and the
Company.

       

      “Purchaser Ordinary
Shares” means ordinary shares of the Purchaser, par value US$0.0000005
per share.

       

      “Representatives”
means, with respect to any Person, such Person’s officers, directors, employees,
counsel, investment bankers, consultants, accountants and other authorized
representatives or advisors.

       

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

       

      “SEC” means the U.S.
Securities and Exchange Commission.

       

      “SEC Reports” means
reports deemed to be filed by the Purchaser with the SEC under Sections 13(a) or
15(d) of the Exchange Act.

       

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

       

      “Sellers and Company
Disclosure Schedule” means the disclosure schedule attached hereto, dated
as of the date hereof, delivered by the Sellers and the Company to the
Purchaser.


      
        
           


        

        
          - 7
-

          
            

          

        

        
           


        

      

       

      “Subsidiary” means,
with respect to any Person, any other Person of which (i) at least a majority of
the securities or ownership interests, having by their terms ordinary voting
power to elect a majority of the board of directors or elect or appoint other
Persons performing similar functions, is directly or indirectly owned or
controlled by such Person and/or by one or more of its Subsidiaries or (ii) more
than half of the board of directors, or similar governing body, is controlled by
such Person, by voting securities or otherwise.

       

      “Tax” means all
central, national, federal, state, provincial, municipal, local and foreign
income, profits, franchise, gross receipts, environmental, customs duty, share
capital, severance, stamp, payroll, sales, employment, unemployment, disability,
use, property, withholding, excise, production, value added, conveyance,
transfer, occupancy and other taxes, duties or assessments of any nature
whatsoever, together with all interest, penalties and additions imposed with
respect to such amounts and any interest in respect of such penalties and
additions.

       

      “Tax Asset” means any
net operating loss, net capital loss, Tax basis in any asset, investment Tax
credit or any other credit or Tax attribute that could reduce Taxes (including
deductions and credits related to alternative minimum Taxes).

       

      “Tax Returns” means
all returns and reports (including elections, declarations, disclosures,
schedules, estimates and information returns) supplied or required to be
supplied to a Tax authority relating to Taxes.

       

      “Trade Secrets” has
the meaning set forth in the definition of “Intellectual Property”.

       

      “Trademarks” has the
meaning set forth in the definition of “Intellectual Property”.

       

      “Trading Day” means
any day when the Nasdaq Global Select Market is open for trading.

       

      “US GAAP” means the
generally accepted accounting principles in the United States of
America.

       

      “U.S. Securities Laws”
means the Exchange Act, the Securities Act, all applicable state securities laws
or blue sky laws, and any rules or regulations promulgated
thereunder.

       

      “Valuation” shall mean
the product of (i) the 2010 NPAT, as calculated in accordance with US GAAP and
reflected in the 2010 Financial Statements and (ii) (a) 5, if the 2010 NPAT is
less than US$6,500,000, or (b) 8, if the 2010 NPAT is equal to or more than
US$6,500,000, provided, that in no
event shall the Valuation exceed US$80,000,000.

       

      “WFOE” means a wholly
foreign owned enterprise registered in the PRC to be established under the Laws
of the PRC, which shall be the wholly-owned Subsidiary of the Hong Kong Company
and may enter into one or more agreements with the Company in order for such
enterprise, the Hong Kong Company and the Offshore Company to enjoy, among other
things, the economic benefits of the Company’s business.


      
        
           


        

        
          - 8
-

          
            

          

        

        
           


        

      

       

      Section
1.2           Other Defined
Terms.  The following terms shall have the meanings ascribed to
them in the corresponding Sections set forth below:

       

      
        
          
            
              	
                      Defined Terms

                    	
                      Section

                    
	 
      	 
      
	
                      “Affiliate
      Transaction”

                    	
                      3.20

                    
	
                      “Agreement”

                    	
                      Preamble

                    
	
                      “Arbitration
      Procedures”

                    	
                      10.5(a)

                    
	
                      “Arbitration
      Rules”

                    	
                      10.5(a)

                    
	
                      “Bankruptcy
      and Equity Exceptions”

                    	
                      3.1

                    
	
                      “Basket
      Amount”

                    	
                      9.3(a)

                    
	
                      “Benefit
      Plans”

                    	
                      3.14(b)

                    
	
                      “Cayman
      Certification”

                    	
                      5.4(a)

                    
	
                      “Closing”

                    	
                      2.3(a)

                    
	
                      “Closing
      Date”

                    	
                      2.3(a)

                    
	
                      “Company”

                    	
                      Preamble

                    
	
                      “Company
      Employee”

                    	
                      3.14(a)

                    
	
                      “Company
      Equity Interests”

                    	
                      Recitals

                    
	
                      “Company
      Leased Real Property”

                    	
                      3.16(b)

                    
	
                      “Company
      Leases”

                    	
                      3.16(b)

                    
	
                      “Company
      Material Contracts”

                    	
                      3.18(a)

                    
	
                      “Confidential
      Information”

                    	
                      5.9(a)

                    
	
                      “Escrow
      Account”

                    	
                      5.2

                    
	
                      “Escrow
      Agent”

                    	
                      5.2

                    
	
                      “Expenses”

                    	
                      10.3

                    
	
                      “Financial
      Statements”

                    	
                      3.10(a)

                    
	
                      “First
      Payment”

                    	
                      2.2(a)

                    
	
                      “HKIAC”

                    	
                      10.5(a)

                    
	
                      “Nasdaq
      Exemption”

                    	
                      5.4(b)

                    
	
                      “Offshore
      Company Shares”

                    	
                      Recitals

                    
	
                      “Offshore
      Reorganization Regulatory Approvals”

                    	
                      3.8(a)

                    
	
                      “Pre-Closing
      Tax Period”

                    	
                      5.11(a)

                    
	
                      “Post-Closing
      Tax Period”

                    	
                      5.11(b)

                    
	
                      “Prohibitive
      Order”

                    	
                      6.1(b)

                    
	
                      “Purchase”

                    	
                      2.1

                    
	
                      “Purchaser”

                    	
                      Preamble

                    
	
                      “Purchaser
      Indemnified Party”

                    	
                      9.2(a)

                    
	
                      “Remainder
      Amount”

                    	
                      2.2(c)

                    
	
                      “Second
      Payment”

                    	
                      2.2(b)

                    
	
                      “Sellers”

                    	
                      Preamble

                    
	
                      “Seller
      Indemnified Party”

                    	
                      9.2(d)

                    
	
                      “Seller
      Tax Return”

                    	
                      5.11(d)

                    
	
                      “Shareholder
      A”

                    	
                      Preamble

                    
	
                      “Shareholder
      B”

                    	
                      Preamble

                    
	
                      “Stub
      Period”

                    	
                      5.11(a)

                    
	
                      “Stub
      Period Objection Notice”

                    	
                      5.11(e)

                    
	
                      “Stub
      Period Returns”

                    	
                      5.11(e)

                    


            

          

        

      

       

      
        
           


        

        
          - 9
-

          
            

          

        

        
           


        

      
 

      
        
          
            
              	
                      Defined Terms

                    	
                      Section

                    
	 
      	 
      
	
                      “Termination
      Date”

                    	
                      8.1(b)

                    
	
                      “Third
      Party Claim”

                    	
                      9.4(b)

                    
	
                      “Third
      Payment”

                    	
                      2.2(c)

                    
	
                      “Transfer”

                    	
                      5.12(a)

                    


            

          

        

      

      


      Section
1.3           Interpretation and Rules of
Construction.  Unless the express context requires
otherwise:

       

      (a)           The
words “herein”, “hereof”, “hereto” 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.

       

      (b)           Whenever
the words “include”, “includes” or “including” appear, they shall be read to be
followed immediately by the words “without limitation”.

       

      (c)           The
symbol “US$” or the words “U.S. dollars” means the lawful currency of the United
States of America.

       

      (d)           The
use of the word “or” is not intended to be exclusive unless otherwise expressly
indicated.

       

      (e)           The
terms defined in the singular shall have a comparable meaning when used in the
plural, and vice versa.

       

      (f)    
       References to the Preamble or any
specific Recital, Article, Section, Schedule or Exhibit shall refer,
respectively, to the Preamble or specific Recital, Article, Section or Schedule
of, or Exhibit to, this Agreement.

       

      (g)           References
to a Person shall also be references to its successors and permitted
assigns.

       

      (h)           The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

       

      (i)      
     All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant to this Agreement, unless otherwise defined
therein.

       

      (j)       
    Except as expressly stated in this Agreement, all
references to any statute, rule or regulation are to the statute, rule or
regulation as amended, modified, supplemented or replaced from time to time
(and, in the case of any statute, include any rules and regulations promulgated
under such statute), and all references to any section of any statute, rule or
regulation include any successor to the section.

       

      (k)           The
parties hereto have participated jointly in drafting and negotiating this
Agreement.  In the event that an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto, and no presumption or burden of proof shall arise
favoring or disfavoring any party hereto by virtue of the authorship of any
provision hereof.


      
        
           


        

        
          - 10
-

          
            

          

        

        
           


        

      

    

     

    
       

      ARTICLE
II

       

      SALE AND
PURCHASE

       

      Section
2.1           Sale and
Purchase.  Upon the terms and subject to the conditions set
forth in this Agreement, each of the Sellers shall sell and transfer at the
Closing all of the Offshore Company Shares to the Purchaser, free and clear of
any Liens, and the Purchaser shall purchase, acquire and accept all of the
Offshore Company Shares from the Sellers (the “Purchase”).

       

      Section
2.2           Purchase Price and
Payments.

       

      (a)           First
Payment.  Upon the terms and subject to the conditions of this
Agreement, at the Closing the Purchaser shall make a single payment (the “First Payment”) to
the Sellers in the following manner:

       

      (i)           each
of Shareholder A and Shareholder B shall receive an amount equal to the product
of (x) the percentage of its respective shareholding in the Company as of the
date of this Agreement, as set forth in Schedule 2.2(a)(1) of this Agreement;
(y) 25%; and (z) US$80,000,000; and

       

      (ii)          each
of the Sellers, other than Shareholder A and Shareholder B, shall receive an
amount equal to the product of (x) the percentage of its respective shareholding
in the Company as of the date of this Agreement, as set forth in Schedule
2.2(a)(1) of this Agreement; (y) 40%; and (z) US$80,000,000;

       

      of
which

       

      (x)          (1)
50% of the First Payment payable to each Seller, other than Shareholder B, shall
be made in cash, payable by wire transfer of immediately available U.S. dollar
funds and (2) the remaining 50% of the First Payment payable to each Seller,
other than Shareholder B, shall be made in Purchaser Ordinary Shares;
and

       

      (y)         100%
of the First Payment payable to Shareholder B shall be made in Purchaser
Ordinary Shares.

       

      The
number of Purchaser Ordinary Shares payable to each Seller pursuant to this
Section 2.2(a) shall be determined by dividing (A) the amount to be paid in
Purchaser Ordinary Shares by (B) the average of the Closing Share Prices for
thirty (30) Trading Days up to the date immediately prior to the date of this
Agreement, and with the number of Purchaser Ordinary Shares rounded up to the
nearest whole number.  For illustrative purposes only, the cash and
Purchaser Ordinary Shares each Seller shall receive in the First Payment is set
forth in Schedule 2.2(a)(2) of this Agreement.

       

      (b)           Contingent Second
Payment.  As soon as reasonably practicable following June 30,
2010, the Purchaser shall use its commercially reasonable efforts to cause the
Auditor to prepare and deliver the First Half 2010 Financial Statements to each
of the Purchaser and Shareholder A.  If the Offshore Company’s First
Half 2010 NPAT is equal to or greater than US$5,000,000, the Purchaser shall
make a single payment (the “Second Payment”) to
the Sellers within ten (10) Business Days after the delivery by the Auditor to
the Purchaser of the First Half 2010 Financial Statements in the following
manner:

       

      
        
           


        

        
          - 11
-

          
            

          

        

        
           


        

      

       

      (i)           each
of Shareholder A and Shareholder B shall receive an amount equal to the product
of (x) the percentage of its respective shareholdings in the Offshore Company at
the time of the Closing; (y) 25%; and (z) US$80,000,000; and

       

      (ii)          each
of the Sellers, other than Shareholder A and Shareholder B, shall receive an
amount equal to the product of (x) the percentage of its respective shareholding
in the Offshore Company at the time of the Closing; (y) 10%; and (z)
US$80,000,000;

       

      of
which

       

      (x)          (1)
50% of the Second Payment payable to each Seller, other than Shareholder B,
shall be made in cash, payable by wire transfer of immediately available U.S.
dollar funds and (2) the remaining 50% of the Second Payment payable to each
Seller, other than Shareholder B, shall be made in Purchaser Ordinary Shares;
and

       

      (y)         100%
of the Second Payment payable to Shareholder B shall be made in Purchaser
Ordinary Shares.

       

      The
number of Purchaser Ordinary Shares payable to each Seller pursuant to this
Section 2.2(b) shall be determined by dividing (A) the amount to be made in
Purchaser Ordinary Shares by (B) the average of the Closing Share Prices for
thirty (30) Trading Days up to and inclusive of the sixth (6th) Business Day
prior to the date of the Second Payment, and with the number of Purchaser
Ordinary Shares rounded up to the nearest whole number.

       

      (c)           Contingent Third
Payment.  As soon as reasonably practicable following December
31, 2010, the Purchaser shall use its commercially reasonable efforts to cause
the Auditor to prepare and deliver the 2010 Financial Statements to each of the
Purchaser and Shareholder A.  Upon receipt by the Purchaser of the
2010 Financial Statements from the Auditor, the Purchaser shall calculate the
Valuation and subtract from the Valuation the aggregate amounts received by all
of the Sellers in the First Payment and the Second Payment (if any) (such
resulting amount, the “Remainder
Amount”).  If the Remainder Amount is a positive number, the
Purchaser shall make a single payment (the “Third Payment”) to
the Sellers within ten (10) Business Days after the delivery by the Auditor to
the Purchaser of the 2010 Financial Statements in the following
manner:

       

      each of
the Sellers shall receive an amount equal to the product of (x) the percentage
of its respective shareholding in the Offshore Company at the time of the
Closing and (y) the Remainder Amount, 

       

      of
which

       

      
        
           


        

        
          - 12
-

          
            

          

        

        
           


        

      


      (x)           (1)
50% of the Third Payment payable to each Seller, other than Shareholder B, shall
be made in cash, payable by wire transfer of immediately available U.S. dollar
funds and (2) the remaining 50% of the Third Payment payable to each Seller,
other than Shareholder B, shall be made in Purchaser Ordinary Shares;
and

       

      (y)          100%
of the Third Payment payable to Shareholder B shall be made in Purchaser
Ordinary Shares.

       

      The
number of Purchaser Ordinary Shares payable to each Seller pursuant to this
Section 2.2(c) shall be determined by dividing (A) the amount to be made in
Purchaser Ordinary Shares by (B) the average of the Closing Share Prices for
thirty (30) Trading Days up to and inclusive of the sixth (6th) Business Day
prior to the date of the Third Payment, and with the number of Purchaser
Ordinary Shares rounded up to the nearest whole number.  If the
Remainder Amount is a negative number, the Purchaser shall not be required to
make any payments, nor shall any of the Sellers be obligated to make any
payments to the Purchaser.

       

      (d)           Not
less than five (5) Business Days prior to the last day on which any of the First
Payment, the Second Payment (if any) or the Third Payment (if any) is due, the
Sellers shall designate in writing to the Purchaser the account or accounts to
which the cash portions of such payments are to be made.

       

      Section
2.3           Closing.

       

      (a)           Upon
the terms and subject to the conditions set forth in this Agreement, the closing
of the Purchase (the “Closing”) shall take
place at the offices of Sullivan & Cromwell LLP, Suite 501, Tower 1,
China World Trade Center, One Jianguo Menwai Avenue, Beijing, PRC, at
9:30 A.M., Beijing time, no later than the fifth (5th) Business Day
following the date on which all of the conditions set forth in Article VI
(other than those conditions that by their nature can only be satisfied at the
Closing but subject to the satisfaction or waiver of such conditions) have been
satisfied or waived, or at such other location, time or date as may be agreed
upon in writing by the Sellers and the Purchaser (the date on which the Closing
occurs, the “Closing
Date”).

       

      (b)           At
the Closing, in addition to the First Payment provided for in Section 2.2(a),
the Purchaser shall deliver, or cause to be delivered, to the Sellers the
following:

       

       (i)          the
certificate to be delivered by the Purchaser pursuant to Section 6.3(a) and
Section 6.3(b) hereof;

       

       (ii)         a
receipt acknowledging the receipt of the items set forth in Section 2.3(c)(i)
hereof; and

       

       (iii)        such
other documents and instruments as may be reasonably required to consummate the
transactions contemplated by this Agreement.

       

      (c)           At
the Closing, each of the Sellers shall deliver, or cause to be delivered, to the
Purchaser the following:

       

       (i)          the
certificate or certificates evidencing all of the Offshore Company Shares, duly
endorsed in blank or accompanied by share transfer forms duly endorsed in blank
in proper form for transfer, with appropriate transfer stamps, if any,
affixed;

       

      
        
           


        

        
          - 13
-

          
            

          

        

        
           


        

      

       

      (ii)          the
resolution of the board of directors of the Offshore Company authorizing the
transfer of all of the Offshore Company Shares to the Purchaser;

       

      (iii)         a
certified copy of the register of members of the Offshore Company evidencing
that all of the Offshore Company Shares have been transferred to the
Purchaser;

       

      (iv)         the
certificate to be delivered pursuant to Section 6.2(a), Section 6.2(b), Section
6.2(c) and Section 6.2(f) hereof;

       

      (v)          written
resignations of each member of the board of directors, except Shareholder A, of
each of the Company, the WFOE, the Hong Kong Company and the Offshore
Company;

       

      (vi)         a
receipt acknowledging receipt of the First Payment by the Purchaser in full
satisfaction of its obligations under Section 2.2(a) hereof; and

       

      (vii)        such
other documents and instruments as may be reasonably required to consummate the
transactions contemplated by this Agreement, including the items set forth in
Schedule 2.3(c)(v).

       

      ARTICLE
III

       

      REPRESENTATIONS AND
WARRANTIES OF THE SELLERS AND

      THE
COMPANY

       

      SUB-ARTICLE
A

      REPRESENTATIONS AND
WARRANTIES OF THE SELLERS

       

      Each of
the Sellers, severally but not jointly, hereby represents and warrants to the
Purchaser as of the date hereof and as of the Closing Date:

       

      Section
3.1           Authorization of
Transaction; Binding Obligation.  Such Seller has the requisite
power and authority and has taken all actions necessary to execute and deliver
this Agreement, to consummate the transactions contemplated hereby and to
perform its obligations hereunder.  This Agreement has been duly
executed and delivered by such Seller, and constitutes the legal, valid and
binding obligation of such Seller, enforceable against such Seller in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar Laws of general applicability
relating to or affecting creditor’s rights and to general equitable principles
(collectively, the “Bankruptcy and Equity
Exceptions”).

       


      
        
           


        

        
          - 14
-

          
            

          

        

        
           


        

      


      Section
3.2           Non-Contravention.  The
execution, delivery and performance of this Agreement by such Seller do not, and
the consummation of the transactions contemplated hereby will not, constitute or
result in a breach or violation of, a termination (or right of termination)
or default (or an event that with notice or lapse of time or both would become a
default) under, the creation or acceleration of any obligations under, the
creation of a Lien on any of the assets of such Seller pursuant to, or the
necessity of obtaining any consent, waiver or approval with respect to, any
Contract or other material instrument or obligation applicable to such Seller or
its properties or assets, or conflict with or violate any Law to which such
Seller, or its properties or assets, is subject.

       

      Section
3.3           Title to the Offshore
Company Shares.  Subject to the completion of the Offshore
Reorganization, at all times prior to the Closing Date and at the Closing: (a)
such Seller will be the record and beneficial owner of the Offshore Company
Shares issued to such Seller in connection with the Offshore Reorganization,
free and clear of any Liens; (b) such Seller will not be party to any option,
warrant, purchase right or other Contract (other than this Agreement) that could
require such Seller to Transfer or otherwise dispose of, or subject to any Lien,
the Offshore Company Shares held by such Seller; and (c) such Seller will not be
a party to any voting trust, proxy or other agreement or understanding (other
than under this Agreement) with respect to the voting of the Offshore Company
Shares.  Upon delivery to the Purchaser at the Closing of the
certificate or certificates evidencing the Offshore Company Shares owned by such
Seller, duly endorsed by such Seller in blank or accompanied by share transfer
forms duly endorsed by such Seller in blank in proper form for Transfer, with
appropriate transfer stamps, if any, affixed, such Seller’s respective record
and beneficial ownership interests in the Offshore Company Shares owned by such
Seller (including good title) will pass to the Purchaser, free and clear of any
Liens, and neither the Seller nor any third party will have any continuing
right, title or interest in or to the Offshore Company Shares.

       

      Section
3.4           U.S. Securities
Laws.

       

      (a)           Such
Seller is not a “U.S. person” as defined in Rule 902(k) of Regulation S under
the Securities Act.

       

      (b)           Such
Seller has complied with all U.S. Securities Laws in connection with the
transactions contemplated by this Agreement.

       

      SUB-ARTICLE
B

      REPRESENTATIONS AND
WARRANTIES OF THE SELLERS AND THE COMPANY

       

      Each of
the Sellers and the Company jointly and severally represents and warrants to the
Purchaser as of the date hereof and as of the Closing Date:

       

      Section
3.5           Authorization of
Transaction; Binding Obligation.  The Company has the requisite
corporate power and authority and has taken all corporate action necessary to
execute and deliver this Agreement, to consummate the transactions contemplated
hereby and to perform its obligations hereunder.  This Agreement has
been duly executed and delivered by the Company, and constitutes the legal,
valid and binding obligation of the Company, enforceable against the Company, in
accordance with its respective terms, subject to the Bankruptcy and Equity
Exceptions.

       

      
        
           


        

        
          - 15
-

          
            

          

        

        
           


        

      

       

      Section
3.6           Organization.  Except
as set forth in Section 3.6 of the Sellers and Company Disclosure Schedule, each
of the Company and
the Company’s Subsidiaries is: (a) a legal entity
duly organized, validly existing and in good standing under the Laws of the PRC
and has the requisite corporate power and authority to own, lease and operate
its properties and assets and to carry on its business as presently conducted;
and (b) is qualified to do business as a foreign corporation or other legal
entity in each jurisdiction where the ownership, leasing or operation of its
properties or assets or the conduct of its business requires such
qualification.  A correct and complete copy of the Organizational
Documents of the Company and of its Subsidiaries, as amended as of the date of
this Agreement, has been made available to the Purchaser, and each such
Organizational Document is in full force and effect.

       

      Section
3.7           Non-Contravention.  Except
as set forth in Section 3.7 of the Sellers and Company Disclosure Schedule, the
execution, delivery and performance of this Agreement by the Company do not, and
the consummation of the transactions contemplated hereby will not, constitute or
result in (a) a breach or violation of the Organizational Documents of the
Company or any of the Company’s Subsidiaries or (b) a breach or violation
of, a termination (or right of termination) or default (or an event that with
notice or lapse of time or both would become a default) under, the creation or
acceleration of any obligations under, the creation of a Lien on any of the
assets of the Company or any of its Subsidiaries pursuant to, or the
necessity of obtaining any consent, waiver or approval with respect to, any
Contract or other instrument or obligation applicable to the Company or any of
its Subsidiaries or any of their respective properties or assets, or (c)
conflict with or violate any Law to which the Company or any of the Company’s
Subsidiaries, or any of their respective properties or assets, is subject, or
any Governmental Authorization.

       

      Section
3.8           Governmental Approvals and
Third Party Consents.

       

      (a)           Except
for the regulatory approvals referred to in the Plan of Reorganization in
Exhibit B attached
hereto (collectively, the “Offshore Reorganization
Regulatory Approvals”), no notices, reports or other filings are required
to be made by any of the Sellers or the Company or any of its Subsidiaries with,
nor are any Governmental Authorizations required to be obtained by any of the
Sellers or the Company or any of its Subsidiaries from, any Governmental
Authority in connection with the execution, delivery and performance of, and the
consummation of the transactions contemplated by, this Agreement.

       

      (b)           The
execution, delivery and performance of this Agreement, and the consummation of
the transactions contemplated hereby will not conflict with or result in any
violation of or default (with or without notice or lapse of time) under or give
rise to a right of termination or cancellation under any Company Material
Contract (as defined below).

       

      Section
3.9           Company Equity
Interests.

       

      (a)           Except
for the arrangements contemplated by the Offshore Reorganization, the Company
Equity Interests consist of RMB11,182,480 of registered capital, as set forth in
Schedule 2.2(a)(1) of this Agreement (with the Company Equity Interests owned by
each Seller set forth opposite such Seller’s name in Schedule 2.2(a)(1)). Except
for the Company Equity Interests, there are no other outstanding equity or other
interests in or voting or other securities of the Company or other instruments
having the right to vote or convertible into or exercisable or exchangeable for
equity interests or other securities having the right to vote on any matters on
which the Company’s shareholders may vote.  The Company Equity
Interests have been duly authorized, are validly issued, fully paid and
nonassessable, are not subject to any Lien, preemptive rights or subscription
rights and were not issued in violation of the Organizational Documents of the
Company.

       

      
        
           


        

        
          - 16
-

          
            

          

        

        
           


        

      

       

      (b)           Except
as set forth in Section 3.9(b) of the Sellers and Company Disclosure Schedule
and for the arrangements contemplated by the Offshore Reorganization, the
Company has made available to the Purchaser true and complete information
regarding, for each Subsidiary of the Company, (i) its name and jurisdiction of
organization, (ii) the number of shares of or other equity interests in
such Subsidiary that are authorized and (iii) the number of shares or other
equity interests in such Subsidiary that were issued and outstanding, the names
of the holders thereof and the number of shares or other equity interest held by
each such holder.  All issued and outstanding shares or other equity
interest in each of the Company’s Subsidiaries have been duly authorized, are
validly issued, fully paid and nonassessable, are not subject to any Lien,
preemptive rights or subscription rights and were not issued in violation of the
Organizational Documents of such Subsidiary, or any other instruments having the
right to vote, or convertible into or exercisable or exchangeable for securities
having the right to vote on any matters on which the shareholders of a
Subsidiary of the Company may vote.  All of the outstanding shares,
voting securities or other equity interest in each Subsidiary of the Company are
owned, directly or indirectly, by the Company.

       

      (c)           Except
for the arrangements contemplated by the Offshore
Reorganization,  there are no options, warrants or other securities
authorized, issued or outstanding, calls, purchase rights, subscription rights,
exchange rights, convertible or exchangeable securities, “phantom” stock rights,
stock appreciation rights, stock-based performance units, Contracts or
undertakings of any kind, to which the Company or any of its Subsidiaries is a
party or by which it is bound, (i) obligating the Company or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares or other equity interests in, or any security
convertible into or exchangeable or exercisable for any shares or other equity
interest in, or any contractual rights containing any equity features (including
stock appreciation, “phantom” stock, profit participation or similar rights)
with respect to, the Company or any of its Subsidiaries, or (ii) obligating the
Company or any of its Subsidiaries to issue, grant, extend or enter into any
such option, warrant, call, right, security, unit, Contract or
undertaking.  There are no outstanding contractual obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any shares or other equity interests of the Company or any of its
Subsidiaries.

       

      Section
3.10         Financial
Information.

       

      (a)           A
true and correct copy of the unaudited consolidated balance sheet of the Company
and its Subsidiaries as of December 31, 2008 and October 31, 2009 together with
the related unaudited statements of income of the Company for the fiscal years
and/or periods then ended, including any notes thereto (collectively, the “Financial
Statements”), has been made available to the Purchaser.

       

      (b)           The
Financial Statements (i) were prepared based upon the information contained in
the Company Books and Records, (ii) were prepared, in all material respects, in
accordance with US GAAP consistently applied
(except as may be noted therein) and (iii) present fairly and accurately in all
material respects the consolidated financial position and results of operations
and cash flow of the Company and its Subsidiaries as of the dates or for
the periods presented therein.

       

      
        
           


        

        
          - 17
-

          
            

          

        

        
           


        

      

       

      (c)           Except
as set forth in Section 3.10(c) of the Sellers and Company Disclosure
Schedule, the
Company Books and Records have been (i) made available to the Purchaser and (ii)
maintained in material compliance with applicable legal and accounting
requirements and fairly and accurately reflect, in all material respects, all
dealings and transactions in respect of the businesses, assets and Liabilities
of the Company and its Subsidiaries.

       

      (d)           The
Company and its Subsidiaries have no Liabilities, other than (i) Liabilities
expressly reflected, reserved against or otherwise disclosed in the Financial
Statements, (ii) Liabilities incurred after October 31, 2009 in the Company
Ordinary Course of Business and (iii) Liabilities that, individually or in
the aggregate, have not had, and would not reasonably be expected to have, a
Material Adverse Effect.

       

      (e)           Conduct in the Ordinary
Course of Business.  Since October 31, 2009, except as may be
expressly permitted or contemplated by this Agreement (including the Offshore
Reorganization) and as set forth in Section 3.10(e) of the Sellers and Company
Disclosure Schedule, (i) the Company and its Subsidiaries have conducted
their respective businesses only in the Company Ordinary Course of Business,
(ii) there has not occurred any event that has had, or would reasonably be
expected to have, a Material Adverse Effect, (iii) there has not been any
material damage, destruction or other casualty loss with respect to any assets
or property owned, leased or otherwise used by the Company or any of its
Subsidiaries (whether covered by insurance or not), (iv) neither the
Company nor any of its Subsidiaries has increased the compensation of any of
their officers or the rate of pay of any of their employees, except as part of
regular compensation increases in the Company Ordinary Course of Business,
(v) there has not occurred a change in the accounting principles or
practice of the Company or any of its Subsidiaries, except as required by
applicable Laws or a change in US GAAP, and (vi) neither the Company nor any of
its Subsidiaries has declared, set aside, made or paid any dividend or other
distribution, payable in cash, shares, property or otherwise, with respect to
its share capital.

       

      Section
3.11         No Undisclosed
Indebtedness.  There are no issued or outstanding bonds,
debentures or notes of the Company.

       

      Section
3.12         Taxes.

       

      (a)           All
Tax Returns that are required to be filed by or with respect to the Company and
its Subsidiaries have been timely filed, and all such Tax Returns are true and
complete in all material respects.

       

      (b)           All
Taxes that are due (whether or not shown on the Tax Returns referred to in
Section 3.12(a) hereof) have been paid in full, except with respect to Taxes for
which adequate reserves have been reflected in the Financial
Statements.

       

      (c)           To
the Company’s Knowledge, the Tax Returns referred to in Section 3.12(a) hereof
have been examined by the appropriate Tax authority, or the period for
assessment of the Taxes in respect of which such Tax Returns were required to be
filed has expired.

       

      
        
           


        

        
          - 18
-

          
            

          

        

        
           


        

      

       

      (d)          All
material deficiencies asserted or material assessments made as a result of
examinations of the Tax Returns referred to in Section 3.12(a) hereof by the
appropriate Tax authority that are due have been paid in full.

       

      (e)           No
material issues that have been raised by the relevant Tax authority with the
Company or its Subsidiaries in connection with the examination of any of the Tax
Returns referred to in Section 3.12(a) hereof are currently
pending.

       

      (f)           No
waivers of statutes of limitation have been given by or requested with respect
to any Taxes of the Company or any of its Subsidiaries.

       

      (g)          There
are no Liens on any of the assets of the Company or any of its Subsidiaries that
arose in connection with any failure (or alleged failure) to pay any
Tax.

       

      (h)          The
Company and its Subsidiaries are, and at times all have, complied in all
material respects with all applicable Tax Laws.

       

      Section
3.13         Litigation, Compliance and
Governmental Authorizations.

       

      (a)           Except
as set forth in Section 3.13(a) of the Sellers and Company Disclosure Schedule,
(i) there are no Actions or Governmental Orders pending or, to the Sellers’ or
the Company’s Knowledge, threatened against the Company or any of its
Subsidiaries, or any of their respective directors, officers, employees or
shareholders, and (ii) neither the Company nor any of its Subsidiaries is
subject to the provisions of any Governmental Order that is reasonably expected
to have a Material Adverse Effect.

       

      (b)           Except
as set forth in Section 3.13(b) of the Sellers and Company Disclosure Schedule,
the Company is conducting, and at all times since its inception has conducted,
its business in compliance with all Laws or Governmental Orders applicable to
the Company and its Subsidiaries in all material respects.  Neither
the Company nor any
of its Subsidiaries is in violation of their respective Organizational
Documents.

       

      (c)           Except
as set forth in Section 3.13(c) of the Sellers and Company Disclosure Schedule,
each of the Company and its Subsidiaries has all Governmental Authorizations
from, and has made all filings, applications, verifications and registrations
with, all Governmental Authorities that are required in order to permit it to
own and operate its business as presently conducted; all such Governmental
Authorizations are in full force and effect and are current, and no suspension,
modification or cancellation of any Governmental Authorization currently in
effect is threatened or is reasonably likely, and, except as set forth in
Section 3.13(c) of the Sellers and Company Disclosure Schedule, there has not
been any event, occurrence, or circumstance that could reasonably likely result
in any of the Governmental Authorizations currently in effect not being extended
upon its expiration; and, to the Company’s Knowledge, all such Governmental
Authorizations shall survive unchanged the execution of this Agreement and the
consummation of the transactions contemplated hereby.

       

      
        
           


        

        
          - 19
-

          
            

          

        

        
           


        

      


      Section
3.14         Employee
Benefits.

       

      (a)           Except
as set forth in Section 3.14(a) of the Sellers and Company Disclosure Schedule,
the Company has made available to the Purchaser true and complete information
regarding, as of the date of this Agreement (or will make available such
information as of the Closing Date, in case of the WFOE, the Hong Kong Company
and the Offshore Company), (i) the names, corporate and functional titles and
hire dates of the current managers, directors, officers and employees of the
Company and its Subsidiaries as of the date of this Agreement, and of the
Company, its Subsidiaries, the Hong Kong Company, the WFOE and the Offshore
Company as of the Closing Date (each, a “Company Employee”),
including such names and titles of Company Employees on leave from, and their
anticipated dates of return to, the Company, its Subsidiaries, the WFOE, the
Hong Kong Company or the Offshore Company, as applicable, and annual salaries or
hourly rates of such Company Employees, (ii) any independent contractor, agent
or consultant who receives regular payments from the Company or any of its
Subsidiaries, the WFOE, the Hong Kong Company or the Offshore Company, as
applicable, and any other individual to whom the Company or any of its
Subsidiaries, the WFOE, the Hong Kong Company or the Offshore Company, as
applicable, pays or provides or has an obligation or agreement (written or
unwritten) to pay or provide, or a policy or practice of paying or providing
retirement, health, welfare, deferred compensation or any other benefits of any
kind on a regular basis, (iii) each former Company Employee and beneficiary
receiving continued health coverage in accordance with applicable Laws or
pursuant to any Contract, (iv) all bonus, incentive and deferred
compensation grants or awards currently outstanding or to be paid in subsequent
years and (v) all obligations for severance payments on termination of
employment. There are no employment or consulting Contracts to which the Company
is a party or by which it is bound other than as have been made available to the
Purchaser.

       

      (b)           The
Company has made available to the Purchaser true and complete copies of all
benefit and compensation plans, Contracts, policies or arrangements covering
current or former Company Employees, and deferred compensation, stock option,
stock purchase, equity participation, stock appreciation rights, stock based,
“phantom” stock, incentive and bonus plans (including those required by
applicable Laws) (collectively, the “Benefit Plans”), if
any.

       

      (c)           Each
Benefit Plan is now and always has been operated in accordance with its terms
and the requirements of all applicable Laws.  Each of the Company and
its Subsidiaries, the WFOE, the Hong Kong Company and the Offshore Company, as
applicable, has performed all obligations required to be performed by any of
them under, are not in any material respect in default under or in violation of,
and have no knowledge of any default or violation by any party to, any Benefit
Plan.  No Action is pending before any Governmental Authority or, to
the Sellers’ or the Company’s Knowledge, threatened to be brought by or before
any Government Authority with respect to any Benefit Plan.

       

      (d)           All
contributions, premiums or payments required to be made with respect to any
Benefit Plan have been made on or before their due dates.  All such
contributions have been fully deducted for income tax purposes and no such
deduction has been challenged or disallowed by any Governmental Authority, and
no fact or event exists which would be expected to give rise to any such
challenge or disallowance.

       

      (e)           Each
of the Company and its Subsidiaries, the WFOE, the Hong Kong Company and the
Offshore Company, as applicable, has made all social security contributions
(including contributions to all mandatory provident fund schemes) in respect of
or on behalf of all Company Employees in accordance with applicable
Laws.

       

      
        
           


        

        
          - 20
-

          
            

          

        

        
           


        

      


      (f)           There
has been no amendment to, announcement by the Company or any of its
Subsidiaries, the WFOE, the Hong Kong Company or the Offshore Company relating
to, or change in employee participation or coverage under, any Benefit Plan
which would increase the expense of maintaining such plan above the level of the
expense incurred therefor for the most recent fiscal year and reflected in the
Financial Statements.

       

      (g)           Neither
the execution, delivery and performance of this Agreement nor the consummation
of the transactions contemplated hereby, including as a result of any
termination of employment prior to or following the Closing Date, will (i)
result in any increase in compensation or any payment (including severance,
unemployment compensation, golden parachute or otherwise) becoming due to any
current or former Company Employee under any Benefit Plan or otherwise from the
Company, (ii) increase any benefits otherwise payable under any Benefit Plan or
(iii) result in any acceleration of the time of payment or vesting of any
such benefit.  All contributions and other payments required to be
made by the Company or any of its Subsidiaries, the WFOE, the Hong Kong Company
or the Offshore Company, as applicable, to any Benefit Plan with respect to any
period ending at the Closing Date have been made or reserves adequate for such
contributions or other payments have been or will be set aside therefor and have
been or will be reflected in the Financial Statements.

       

      (h)           There
are no material outstanding Liabilities of any of the Benefit Plans other than
Liabilities for benefits to be paid to participants in such Benefit Plans and
their beneficiaries in accordance with the terms of such Benefit
Plan.  Except as provided by applicable Laws, there are no
restrictions on the rights of the Company or any of its Subsidiaries to amend or
terminate any of the Benefit Plans.

       

      Section
3.15         Labor.

       

      (a)           Neither
the Company nor any of its Subsidiaries is a party to or otherwise bound by any
collective bargaining agreement or other Contract with a labor union or labor
organization, and no such collective bargaining agreement is being negotiated or
contemplated by the Company or any of its Subsidiaries.  No labor
organization or group of Company Employees has made any attempt for recognition
to the Company or any of its Subsidiaries, and there are no pending
representation or certification proceedings or, to the Company’s Knowledge,
petitions seeking a representation proceeding presently pending or threatened to
be brought or filed with any labor relations tribunal or authority relating to
the Company or any of its Subsidiaries.  No strike, work stoppage or
material labor dispute is pending or, to the Company’s Knowledge, threatened
that involves the Company or any of its Subsidiaries.

       

      (b)           There
is no charge of discrimination in employment or unfair labor practice that has
been asserted or is now pending or threatened before any Governmental Authority
against the Company or any of its Subsidiaries in any jurisdiction where Company
Employees are located.  Each of the Company and its Subsidiaries is in
compliance in all material respects with all applicable Laws relating to labor,
employment, termination of employment or similar matters, including any
applicable wage and hour laws, and there are no pending, or threatened, charges
or complaints by any current or former Company Employees or any Governmental
Authority alleging a violation of any such Laws.

       

      Section
3.16         Real
Property.

       

      (a)           Neither
the Company nor any of its Subsidiaries owns any real property.

       

      
        
           


        

        
          - 21
-

          
            

          

        

        
           


        

      

       

      (b)           Except
as set forth in Section 3.16(b) of the Sellers and Company Disclosure Schedule,
the Company has made available to the Purchaser true and complete information
regarding all real property leased or subleased to the Company or any of its
Subsidiaries as a tenant or subtenant (the “Company Leased Real
Property”).  A correct and complete copy of all real property
leases and subleases relating to the Company Leased Real Property (the “Company Leases”) and
all ancillary documents pertaining thereto, which the Company or any of its
Subsidiaries is a party to or is bound by, has been made available to the
Purchaser.  Except as set forth in Section 3.16(b) of the Sellers and
Company Disclosure Schedule, (i) each Company Lease is in full force and effect
and enforceable against the Company or any of its Subsidiaries that is a party
thereto and, to the Company’s Knowledge, the other parties thereto, in
accordance with its terms, subject to the Bankruptcy and Equity Exceptions, (ii)
none of the Company and its Subsidiaries is in material breach of or default
under any Company Lease, (iii) no event has occurred that, with notice or lapse
of time or both, is reasonably likely to constitute a material breach or default
by the Company or any of its Subsidiaries under any Company Lease, and (iv) all
improvements and fixtures and equipment located on the Company Leased Real
Property and owned by the Company or any of its Subsidiaries and used in the
business of the Company and/or its Subsidiaries (x) are in reasonably good
condition and repair, subject to reasonable wear and tear, and (y) are
sufficient for the current and currently contemplated operation of the business
of the Company or any of its Subsidiaries, as the case may be.

       

      Section
3.17         Intellectual
Property.

       

      (a)          Except
as set forth in Section 3.17(a) of the Sellers and Company Disclosure Schedule,
none of the Company Owned Intellectual Property is registered with, or is
subject to a pending application for registration with, any Governmental
Authority.

       

      (b)          The
Sellers and/or the Company have made available to the Purchaser all Contracts
relating to any Company Owned Intellectual Property.

       

      (c)          The
Company and its Subsidiaries own or have sufficient rights to use the Company
Owned Intellectual Property and the Company Licensed Intellectual Property, free
and clear from any Liens.  All such rights shall survive unchanged the
consummation of the transactions contemplated by this Agreement.  None
of the Company Owned Intellectual Property or Company Licensed Intellectual
Property that is exclusively licensed by the Company or its Subsidiaries is
subject to any outstanding Governmental Order against the Company or its
Subsidiaries materially and adversely affecting the Company’s or any of its
Subsidiaries’ use thereof or rights thereto.

       

      (d)          The
Company Owned Intellectual Property and the Company Licensed Intellectual
Property include all Intellectual Property used or held for use in connection
with the operation of the businesses of the Company and its Subsidiaries as
currently conducted, and there are no other items of Intellectual Property that
are material to or necessary for the operation of the businesses of the Company
and its Subsidiaries as currently conducted or for the continued operation of
the businesses of the Company and its Subsidiaries between the Closing and
December 31, 2010 in substantially the same manner as operated prior to the
Closing.

       

      
        
           


        

        
          - 22
-

          
            

          

        

        
           


        

      


      (e)          Except
as set forth in Section 3.17(e) of the Sellers and Company Disclosure Schedule,
to the Company’s Knowledge, (i) The Company and its Subsidiaries are not infringing on or
otherwise violating any Intellectual Property right of any third party, and (ii)
to the Company’s Knowledge, no third party is infringing on or otherwise
violating any Company Owned Intellectual Property.

       

      (f)           The
Company and its Subsidiaries have taken reasonable measures to protect the
confidentiality of all material Trade Secrets that are owned or used by the
Company or any of its Subsidiaries, and to the Company’s Knowledge, such Trade
Secrets have not been used or disclosed by any Person except pursuant to a
non-disclosure and/or license agreement that has not been breached.

       

      (g)          The
Company IT Systems that are material to the conduct of the businesses of the
Company and its Subsidiaries as currently conducted are sufficient for their
intended use and for the operation of the businesses of the Company and its
Subsidiaries as currently conducted, subject to customary wear and tear and
malfunctions and breakdowns that have arisen from time to time.

       

      Section
3.18         Material
Contracts.

       

      (a)           Except
as set forth in Section 3.18(a) of the Sellers and Company Disclosure Schedule,
the Sellers and/or the Company have made available to the Purchaser a correct
and complete copy of each Contract in effect as of the date of this Agreement
and will make available a correct and complete copy of each Contract in effect
as of the Closing Date to which the Company or any of its Subsidiaries is a
party (or with respect to clauses (v) and (vii) below, by which any of the
Company Employees is bound) that (A) is material to the Company and its
Subsidiaries, taken as a whole, or (B) is one of the following types of
Contracts ((A) and (B) together, the “Company Material
Contracts”):

       

      (i)           any
Contract that is reasonably expected to require the payment by or to the Company
or any of its Subsidiaries of (x) more than US$100,000, in the aggregate during
any twelve (12)-month period or (y) more than US$100,000, in the aggregate over
the term of each such Contract, and, in the cases of both (x) and (y), which
does not terminate or is not terminable without penalty upon notice of sixty
(60) days or
less;

       

      (ii)          any
joint venture, partnership, limited liability company, strategic alliance and
other similar Contract involving a sharing of profits and losses;

       

      (iii)         any
Contract entered into within the last three (3) years relating to the
acquisition or disposition of any business or operations (whether by merger,
sale of shares, sale of assets or otherwise);

       

      (iv)         any
Contract that has any material executory indemnification obligations relating to
the acquisition, lease or disposition, directly or indirectly, by merger or
otherwise, of assets of, or share capital or other equity interest in, another
Person, other than such Contracts that are not material to the Company or any of
its Subsidiaries;

       

      
        
           


        

        
          - 23
-

          
            

          

        

        
           


        

      


      (v)          any
Contract that (x) limits the ability of the Company or any of its Subsidiaries
or, to the Company’s Knowledge, any of the Company Employees after the Closing
to compete in any line of business or in any geographic area or (y) contains an
exclusivity obligation of, or a grant of “most favored nation” or similar status
to a third party by, the Company or any of its Subsidiaries;

       

      (vi)        any
Contract (x) that grants any right of first refusal or first offer or similar
right to a third party by the Company or any of its Subsidiaries, (y) that
requires the disposition of material assets or line of the business of the
Company or any of its Subsidiaries or (z) that limits the payment of dividends
or other distributions by the Company or any of its Subsidiaries;

       

      (vii)       any
Contract containing any covenant limiting the freedom of the Company or any of
its Subsidiaries or, to the Company’s Knowledge, any of the Company Employees,
to solicit or hire Persons for employment or consultancy;

       

      (viii)      any
Contract that limits the freedom of the Company or any of its Subsidiaries to
(A) engage in any business or carry on or expand the scope or geographical scope
of any business anywhere in the world, or (B) manufacture, market, sell, conduct
research and development for or provide services for any products, equipment,
goods or services of any business, or (C) source, purchase or procure from any
Person any materials, supplies, merchandise or other goods for any
business;

       

      (ix)         any
Contract evidencing any material Affiliate Transaction;

       

      (x)          any
Contract evidencing any Indebtedness of the Company or any of its Subsidiaries,
or any guarantee thereof, in excess of US$300,000 other than the Indebtedness to
direct or indirect wholly owned Subsidiaries of the Company made in the Company
Ordinary Course of Business;

       

      (xi)         any
settlement agreement entered into since January 1, 2007, other than releases
immaterial in nature or amount entered into in the Company Ordinary Course of
Business;

       

      (xii)      
 any Contract in respect of the employment of any director, executive
officer or other Key Employee;

       

      (xiii)       any
Contract that is a license or sublicense of any item of Intellectual Property
(whether as a licensor or a licensee), other than licenses for “off-the-shelf”
commercially available software or that require annual payment of less than
US$50,000, including maintenance fees;

       

      (xiv)      
any Contract that relates to an acquisition, divestiture, merger or business
combination or similar transactions;

       

      (xv)        any
Contract with a Governmental Authority; and

       

      (xvi)       any
other Contract that was not negotiated and entered into in the Company Ordinary
Course of Business.

       

      
        
           


        

        
          - 24
-

          
            

          

        

        
           


        

      

       

      (b)           A
correct and complete copy of each Company Material Contract (including all
amendments, modifications, extensions, renewals, schedules, exhibits or
ancillary agreements with respect thereto) has been made available to the
Purchaser.  Each Company Material Contract is in full force and effect
and is valid, binding and enforceable against the Company or its Subsidiaries
party thereto, as the case may be, and, to the Company’s Knowledge, each other
party thereto in accordance with its terms, subject to the Bankruptcy and Equity
Exceptions.  Neither the Company nor any of its Subsidiaries, nor, to
the Company’s Knowledge, any other party thereto, is in breach or violation of,
or default under, any Company Material Contract, and no event has occurred that
with notice or lapse of time or both would constitute a breach or violation of
or default under any Company Material Contract.

       

      Section
3.19         Environment.  To
the Company’s Knowledge, (a) the Company and its Subsidiaries and the
Company Leased Real Properties are in compliance with all applicable
Environmental Laws, including possessing all Governmental Authorizations
required for their operations under applicable Environmental Laws; (b) none
of the Company, its Subsidiaries or the Company Leased Real Properties are the
subject of any pending written notice, notification, demand, request for
information, citation, summons, complaint or order from any Governmental
Authority, with respect to any matters relating to or arising out of any
Environmental Laws; (c) the Company Leased Real Properties are not
currently subject to any Governmental Order directed to the Company or its
Subsidiaries arising under any Environmental Law; (d) the Company Leased
Real Properties have not been used by the Company or its Subsidiaries, or, to
the Company’s Knowledge, any other Person, for the disposal of Hazardous
Substances; (e) the Company Leased Real Properties have not had any
emissions or discharges by the Company or its Subsidiaries, or, to the Company’s
Knowledge, any other Person, of any Hazardous Substances, except in each case as
permitted under applicable Environmental Laws; and (f) the Company and its
Subsidiaries have
not incurred any material Environmental Liabilities.

       

      Section
3.20         Affiliate
Transactions.  Except as set forth in the Financial Statements,
there are no transactions, agreements, arrangements or understandings between
the Company or any of its Subsidiaries on one hand, and any of its current or
former officers or directors or other Affiliates, on the other hand (excluding
any wholly owned Subsidiary of the Company), that would be expected to require
the fulfillment or payment of any obligations or Liabilities by the Company on
or after the Closing Date (each, an “Affiliate
Transaction”).

       

      Section
3.21         [Reserved.]

       

      Section
3.22         Anti-Bribery
Laws.  None of the Company or any of its Subsidiaries or any
director, officer, manager, shareholder, employee or, to the Sellers’ or the
Company’s Knowledge, any other person (including agents and independent
contractors) acting for or on behalf of the Company or any of its Subsidiaries,
has directly or indirectly: (a) made any contribution, gift, bribe, payoff,
influence payment, kickback or any other fraudulent payment in any form, whether
in money, property or services, or made any promise to pay, or authorized the
payment of any money or the giving of anything of value, to any Public Official
or otherwise (i) to obtain favorable treatment in securing business for the
Company or any of its Subsidiaries, (ii) to pay for favorable treatment for
business secured or (iii) to obtain special concessions or for special
concessions already obtained, for or in respect of the Company or any of its
Subsidiaries, in each case which would have been in violation of any applicable
Law, including any Anti-Bribery Law; or (b) established or maintained any fund
or assets in which the Company or any of its Subsidiaries shall have proprietary
rights that have not been truthfully and accurately recorded in the Company
Books and Records.

       

      
        
           


        

        
          - 25
-

          
            

          

        

        
           


        

      

       

      Section
3.23         OFAC.  To
the Company’s Knowledge, none of the Company or any of its Subsidiaries or any
of their respective Representatives have engaged in transactions connected with
any government, country or other entity or person that is the target of U.S.
economic sanctions administered by the U.S. Treasury Department Office of
Foreign Assets Control, including those designated on its list of Specially
Designated Nationals and Blocked Persons, and none of the Company or any of its
Subsidiaries or any of their respective Representatives is any such person or
entity.

       

      Section
3.24         Brokers.  No
broker, investment banker, financial advisor or other Person is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Sellers, the Company or any of its
Subsidiaries.

       

      Section
3.25         Sufficiency of
Assets.  At all times prior to the Closing Date and at the
Closing, the Company and its Subsidiaries will own or have the right to use all
of the assets, properties and rights necessary for the conduct the respective
businesses of the Company and its Subsidiaries as conducted as of the date
hereof.  After giving effect to the Closing, the Sellers will not own
any assets, properties or rights that are used primarily in the conduct of the
business and operations of the Company and its Subsidiaries as conducted as of
the date hereof.

       

      Section
3.26         No
Solicitation.  Since November 6, 2009, none of the Sellers or
the Company, nor their respective Subsidiaries, Affiliates, Representatives,
employees or members of the board of directors has: (a) solicited,
initiated, entertained, accepted or encouraged the submission of any proposal or
offer from any Person relating to the direct or indirect acquisition of the
equity or other interests of the Company; or (b) participated in any
discussions or negotiations regarding, furnished any information with respect
to, assisted or participated in, or facilitated in any other manner any effort
or attempt by any Person to do or seek any of the foregoing.  Each of
the Sellers and the Company has immediately notified the Purchaser orally and in
writing of any Person’s proposal, offer, inquiry or contact with respect to any
of the foregoing.

       

      Section
3.27         Full
Disclosure.  The Company has provided the Purchaser with all
information requested by the Purchaser in connection with its decision to enter
into the transactions contemplated by this Agreement.  None of the
representations or warranties made by the Sellers and/or the Company in this
Agreement and none of the ancillary agreements or any other statements or
certificates or other materials or information made or delivered, or to be made
or delivered, by the Sellers and/or the Company to the Purchaser or any of its
Representatives in connection herewith or therewith, contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements herein or therein not misleading in light of the circumstances
under which they were made.  There are no facts which (individually or
in the aggregate) (a) materially and adversely affect the business, operations,
assets (including intangible assets), prospects, condition (financial or
otherwise), properties (including intangible properties), Liabilities or results
of operations of the Company and its Subsidiaries taken as a whole; or (b) are
otherwise material to the Purchaser’s evaluation of the transactions
contemplated by this Agreement that have not been set forth in this Agreement or
any ancillary agreements or other statements or certificates or other materials
or information made or delivered, or to be made or delivered, by the Sellers
and/or the Company to the Purchaser or any of its Representatives in connection
herewith.

       

      
        
           


        

        
          - 26
-

          
            

          

        

        
           


        

      

    

     

    SUB-ARTICLE
C

    REPRESENTATIONS AND
WARRANTIES IN RESPECT OF THE WFOE, THE HONG

    KONG COMPANY AND THE
OFFSHORE COMPANY

     

    Each of
the Sellers jointly and severally represents and warrants in respect of each of
the WFOE, the Hong Kong Company and the Offshore Company to the Purchaser as of
the Closing Date (it being understood that any breach of any such representation
and/or warranty shall be deemed to be a breach of such representation and/or
warranty by each of the Sellers):

     

    Section
3.28         Certain Representations and
Warranties. Except as set forth in Section 3.28 of the Sellers and
Company Disclosure Schedule, the representations and warranties made by the
Company under Section 3.11 through Section 3.27 hereof shall be made by each of
the Sellers in respect of each of the WFOE, the Hong Kong Company and the
Offshore Company (in each case replacing the references to “the Company” with
“the WFOE”, “the Hong Kong Company” or “the Offshore Company”, respectively), it
being understood that, for purposes of such representations and warranties in
respect of the WFOE, the Hong Kong Company and the Offshore Company, references
to “Subsidiary” or “Subsidiaries” shall also include the Company and any of the
Company’s Subsidiaries.

     

    Section
3.29         Authorization of
Transaction. The WFOE, the Hong Kong and the Offshore Company shall have
the requisite corporate power and authority and shall have taken all corporate
actions necessary to consummate the transactions contemplated hereby (including
the Offshore Reorganization).

     

    Section
3.30         Organization. The
WFOE, the Hong Kong Company and the Offshore Company shall be duly incorporated,
validly existing and in good standing (if applicable) under their respective
jurisdictions of incorporation and will have the requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as presently conducted. Each of the WFOE, the Hong Kong Company and
the Offshore Company
will be qualified to do business as a foreign corporation or other legal
entity in each jurisdiction where the ownership, leasing or operation of its
properties or assets or the conduct of its business requires such
qualification.

     

    Section
3.31         Non-Contravention.
Except as set forth in Section 3.31 of the Sellers and Company Disclosure
Schedule, the consummation of the transactions contemplated hereunder shall not
constitute or result in a breach or violation of a termination (or right of
termination) or default (or an event that with notice or lapse of time or both
would become a default) under, the creation or acceleration of any obligations
under, the creation of a Lien (except for the arrangements contemplated by the
Offshore Reorganization) on any of the assets of any of the WFOE, the Hong Kong
Company or the Offshore Company pursuant to, or the necessity of obtaining any
consent, waiver or approval with respect to, any Contract or other instrument or
obligation applicable to any of the WFOE, the Hong Kong Company or the Offshore
Company or its respective
properties or assets, or conflict with or violate any Law to which any of
the WFOE, the Hong Kong Company or the Offshore Company, or its respective
properties or assets, is subject.

     

    
      
        
        

      

      
        - 27
-

        
          

        

      

      
        
        

      

    

     

    
      Section
3.32         Governmental Approvals and
Third Party Consents.

       

      (a)           Except
for the Company Required Regulatory Approvals, no notices, reports or other
filings shall be required to be made by any of the WFOE, the Hong Kong Company
or the Offshore Company or any of its Subsidiaries with, nor shall any
Governmental Authorizations be required to be obtained by any of the WFOE, the
Hong Kong Company or the Offshore Company or any of its Subsidiaries from any
Governmental Authority in connection with the consummation of the transactions
contemplated hereunder.

       

      (b)           Each
of the WFOE, the Hong Kong Company and the Offshore Company shall have made
available to the Purchaser all of the Contracts pursuant to which consents or
waivers are required to be obtained from any Person, other than a Governmental
Authority, in connection with the consummation of the transactions contemplated
hereunder by the WFOE, the Hong Kong Company and the Offshore
Company.

       

      Section
3.33         Equity
Interests.

       

      (a)           Except
for the equity interests owned by the Offshore Company, there shall be no other
outstanding equity or other interests in or voting or other securities of the
Hong Kong Company.  Except for the equity interests owned by the Hong
Kong Company, there shall be no other outstanding equity or other interests in
or voting or other securities of the WFOE.  Except for the Offshore
Company Shares owned by the Sellers, there shall be no other outstanding equity
or other interests in or voting or other securities of the Offshore
Company.  Nor shall there be other instruments having the right to
vote or convertible into or exercisable or exchangeable for equity interests or
other securities having the right to vote, on any matters on which the
shareholders of the WFOE, the Hong Kong Company or the Offshore Company, as the
case may be, may vote.  Except for the arrangements contemplated by
the Offshore Reorganization, the equity interest of the WFOE, the Hong Kong
Company and the Offshore Company Shares shall have been duly authorized, are
validly issued, fully paid and nonassessable, not subject to any Lien,
preemptive rights or subscription rights (except required as by the Offshore
Reorganization) and not issued in violation of their respective Organizational
Documents.

       

      (b)           Each
of the WFOE, the Hong Kong Company and the Offshore Company shall have made
available to the Purchaser true and complete information regarding, for each of
its Subsidiaries, (i) its name and jurisdiction of organization, (ii) the number
of shares of or other equity interests in such Subsidiary that are authorized
and (iii) the number of shares or other equity interests in such Subsidiary that
are issued and outstanding, the names of the holders thereof and the number of
shares or other equity interest held by each such holder.  Except for
the arrangements contemplated by the Offshore Reorganization, all issued and
outstanding shares or other equity interest in each of the WFOE’s, the Hong Kong
Company’s or the Offshore Company’s Subsidiaries shall have been duly
authorized, validly issued, fully paid and nonassessable, not subject to any
Lien, preemptive rights or subscription rights and not issued in violation of
the Organizational Documents of such Subsidiary, or any other instruments having
the right to vote or convertible into or exercisable or exchangeable for
securities having the right to vote on any matters on which the shareholders of
such Subsidiary may vote.  All of the outstanding shares, voting
securities or other equity interest in each Subsidiary of the WFOE, the Hong
Company or the Offshore Company shall be owned, directly or indirectly, by the
WFOE, the Hong Kong Company or Offshore Company, as applicable.  As a
result of the consummation the transactions contemplated in this Agreement, the
Sellers will not, directly or indirectly, Transfer to the Purchaser any interest
in or contractual control over any entity other than the Offshore Company, the
Hong Kong Company, the WFOE and the Company and its Subsidiaries.

       

      
        
          
          

        

        
          - 28
-

          
            

          

        

        
          
          

        

      

       

      (c)           Except
for the arrangements contemplated by the Offshore Reorganization, there shall be
no options, warrants or other securities authorized, issued or outstanding,
calls, purchase rights, subscription rights, exchange rights, convertible or
exchangeable securities, “phantom” stock rights, stock appreciation rights,
stock-based performance units, Contracts or undertakings of any kind, to which
the WFOE, the Hong Kong Company or the Offshore Company or any of its
Subsidiaries is a party or by which it is bound, (i) obligating the WFOE, the
Hong Kong Company or the Offshore Company or any of its Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares or
other equity interests in, or any security convertible into or exchangeable or
exercisable for any shares or other equity interest in, or any contractual
rights containing any equity features (including stock appreciation, “phantom”
stock, profit participation or similar rights) with respect to, the WFOE, the
Hong Kong Company or the Offshore Company or any of its Subsidiaries, or (ii)
obligating the WFOE, the Hong Kong Company or the Offshore Company or any of its
Subsidiaries to issue, grant, extend or enter into any such option, warrant,
call, right, security, unit, Contract or undertaking.  Except for the
option agreement(s) contemplated by the Offshore Reorganization, there shall be
no outstanding contractual obligations of the WFOE, the Hong Kong Company or the
Offshore Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any shares or other equity interests of the WFOE, the Hong Kong Company
or the Offshore Company or any of its Subsidiaries.

       

      Section
3.34         No Other Representation or
Warranty.  Except for the representations and warranties
contained in this Article III, neither the Company nor any of the Sellers makes
any other express or implied representation or warranty with respect to the
Sellers, the Company, its Subsidiaries, the WFOE, the Hong Kong Company or the
Offshore Company.

       

      ARTICLE
IV

       

      REPRESENTATIONS AND
WARRANTIES OF THE PURCHASER

       

      The
Purchaser hereby represents and warrants to the Sellers as of the date hereof
and as of the Closing Date:

       

      Section
4.1           Organization.  The
Purchaser has been duly incorporated and is validly existing as a corporation
under the Laws of the Cayman Islands and has the requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as presently conducted.

       

      
        
          
          

        

        
          - 29
-

          
            

          

        

        
          
          

        

      

       

      Section
4.2           Authorization of
Transaction; Binding Obligation.  The Purchaser has the
requisite corporate power and authority and has taken all corporate action
necessary to execute and deliver this Agreement, to consummate the transactions
contemplated hereby and to perform its obligations hereunder.  This
Agreement has been duly executed and delivered by the Purchaser and constitutes
the legal, valid and binding obligation of the Purchaser, enforceable against
the Purchaser in accordance with its terms, subject to the Bankruptcy and Equity
Exceptions.

       

      Section
4.3           Non-Contravention.  The
execution, delivery and performance of this Agreement by the Purchaser does not,
and the consummation of the transactions contemplated hereby will not,
constitute or result in (a) a breach or violation of the Organizational
Documents of the Purchaser, (b) a breach or violation of, a termination (or
right of termination) or default (or an event that with notice or lapse of time
or both would become a default) under, the creation or acceleration of any
obligations under, the creation of a Lien on any of the assets of the Purchaser
pursuant to, or the necessity of obtaining consent, waiver or approval with
respect to, any Contract, or other instrument or obligation applicable to the
Purchaser or any of its Subsidiaries or any of their respective properties or
assets or (c) subject to compliance with the matters referred to in Section
4.4, conflict with or violate any Law or License, to which the Purchaser, or any
substantial part of its properties or assets, is subject, except, in the cases
of clauses (b) and (c), for any such breach, violation, termination, default,
creation, necessity, acceleration or conflict that is not, individually or in
the aggregate, reasonably likely to prevent, materially delay or materially
impair the ability of the Purchaser to consummate the transactions contemplated
by this Agreement.

       

      Section
4.4           Governmental
Approvals.  Except for the Nasdaq Exemption referred to in
Section 5.4(b) hereof, no notices, reports or other filings are required to be
made by the Purchaser with, nor are any Governmental Authorizations required to
be obtained by the Purchaser from, any Governmental Authority in connection with
the execution, delivery and performance of, and the consummation of the
transactions contemplated by, this Agreement, except those that the failure to
make or obtain are not, individually or in the aggregate, reasonably likely to
prevent, materially delay or materially impair the ability of the Purchaser to
consummate the transactions contemplated by this Agreement.

       

      Section
4.5           Litigation.  There
are no Actions or Governmental Orders pending or, to the Purchaser’s Knowledge,
threatened in writing against the Purchaser, except for those that are not,
individually or in the aggregate, reasonably likely to prevent, materially delay
or materially impair the ability of the Purchaser to consummate the transactions
contemplated by this Agreement.

       

      Section
4.6           Validity of
Issuance.  The Purchaser Ordinary Shares issuable under the
First Payment, the Second Payment and the Third Payment will be duly authorized
and, when issued in accordance with the provisions of this Agreement and the
Purchaser’s Organizational Documents, will be validly issued, fully paid,
nonassessable and free from any Liens (except as otherwise set forth in this
Agreement and applicable securities Laws).

       

      
        
          
          

        

        
          - 30
-

          
            

          

        

        
          
          

        

      

       

      Section
4.7           SEC
Reports.  Since January 1, 2009, the Purchaser has complied in
all material respects with the filing requirements of Sections 13(a) and 15(d)
of the Exchange Act.  Except as set forth in Section 4.7 of the
Purchaser Disclosure Schedule, the SEC Reports filed by the Purchaser during the
period between January 1, 2009 and the Closing Date, when they were filed with
the SEC, conformed in all material respects to the requirements the Exchange Act
and the rules and regulations promulgated thereunder, and none of such
documents, when they were filed with the SEC, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
in which they were made, not misleading.

       

      Section
4.8           Nasdaq.  The
Purchaser has satisfied the qualitative listing requirements for foreign private
issuers pursuant to Rule 4350(a) of the Nasdaq Marketplace Rules.  The
Purchaser has not received any notice from the Nasdaq Global Select Market to
the effect that the Purchaser is not in material compliance with its listing or
maintenance requirements.

       

      Section
4.9           Brokers.  No
broker, investment banker, financial advisor or other Person is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Purchaser or its
Affiliates.

       

      Section
4.10         No Other Representation and
Warranty.  Except for the representations and warranties
contained in this Article IV, the Purchaser does not make any other express or
implied representation or warranty.

       

      ARTICLE
V

       

      COVENANTS

       

      Section
5.1           Operations,
etc.

       

      (a)           Except
as (x) the Purchaser may otherwise consent in writing, (y) expressly permitted
or otherwise contemplated or required by this Agreement, or (z) required by
applicable Laws or Governmental Orders during the period from the date hereof
until the Closing and, in cases of the covenants with respect to the WFOE, the
Hong Kong Company and the Offshore Company, subject to the consummation of the
Offshore Reorganization, the Company, the WFOE, the Hong Kong Company and the
Offshore Company shall, and the Company shall cause its Subsidiaries to, and the
Sellers shall cause the Company, the WFOE, the Hong Kong Company and the
Offshore Company and their respective Subsidiaries to, (I) conduct their
respective businesses in the Company Ordinary Course of Business, (II) use their
respective best
efforts to preserve their respective business organizations intact, (III) use
their respective commercially reasonable efforts to maintain their respective
Governmental Authorizations and existing relations with their respective
customers, suppliers, creditors, employees and independent contractors, and (IV)
maintain their respective Company Books and Records in the Company Ordinary
Course of Business.  Without limiting the generality of the foregoing,
from the date of this Agreement until the Closing, except as (A) the Purchaser
may otherwise consent in writing, (B) expressly permitted or otherwise
contemplated or required by this Agreement or (C) required by applicable Laws or
Governmental Orders and, in cases of the covenants with respect to the WFOE, the
Hong Kong Company and the Offshore Company, subject to the consummation of the
Offshore Reorganization, none of the Company or the Company’s Subsidiaries, the
WFOE, the Hong Kong Company or the Offshore Company shall, and the Sellers shall
cause each of the Company and the Company’s Subsidiaries, the WFOE, the Hong
Kong Company and the Offshore Company not to, during the period from the date
hereof to the Closing:

       

      
        
          
          

        

        
          - 31
-

          
            

          

        

        
          
          

        

      

       

      (i)           adopt
or propose any change in its Organizational Documents or corporate
structure;

       

      (ii)          establish
any Subsidiary, form any joint venture with any Person, or purchase the equity
interest in any person (except in connection with the Offshore Reorganization or
as required by the transactions contemplated in this Agreement);

       

      (iii)         merge
or consolidate itself with any other Person, or restructure, reorganize or
completely or partially liquidate itself (except as required by the
transactions, including the Offshore Reorganization, contemplated in this
Agreement);

       

      (iv)         issue,
sell, pledge, dispose of, grant, Transfer or encumber, or authorize the
issuance, sale, pledge, disposition, grant, Transfer or encumbrance of, (x) any
of its share capital, (y) any securities convertible into or exchangeable or
exercisable for any of its share capital or (z) any options, calls, warrants or
other rights to acquire any of its share capital or any such convertible,
exchangeable or exercisable securities (except as required by the transactions,
including the Offshore Reorganization, contemplated in this
Agreement);

       

      (v)          declare,
set aside, make or pay any dividend or other distribution, payable in cash,
shares, property or otherwise, with respect to its share capital;

       

      (vi)         transfer
or distribute any cash or assets of the Company, the WFOE, the Hong Kong Company
or the Offshore Company or any of its Subsidiaries (including any cash or assets
of their respective Subsidiaries) other than in the Company Ordinary Course of
Business;

       

      (vii)        incur
any Indebtedness, other than in the Company Ordinary Course of Business, or
guarantee Indebtedness of another Person, or issue or sell any debt securities
or warrants or other rights to acquire its debt securities;

       

      (viii)       make
any loans or advances or capital contributions to, or investments in, any Person
in excess of US$50,000 in the aggregate;

       

      (ix)         create
or incur any material Lien on its properties or assets or fail to initiate
action to have any such Lien removed as promptly as practicable;

       

      (x)          acquire
any securities, business or assets from any other Person other than in the
Company Ordinary Course of Business;

       

      
        
          
          

        

        
          - 32
-

          
            

          

        

        
          
          

        

      

       

      (xi)         make
or authorize any capital expenditure, other than as set forth in the capital
budgets of the Company, a true and complete copy of which has been made
available to the Purchaser;

       

      (xii)        transfer,
sell, lease, license, surrender, divest, cancel, abandon or allow to lapse or
expire or otherwise dispose of any of its product lines or businesses other than
in the Company Ordinary Course of Business;

       

      (xiii)       enter
into, amend, modify, renew, extend or terminate any Company Material Contract in
any material respect, or cancel, modify or waive any material debts or claims or
waive any material rights held by it thereunder;

       

      (xiv)       (A)
fail to file any Tax Return, (B) file a Tax Return that is not true and complete
in all material respects, (C) make, change or revoke any material Tax election,
(D) change any annual Tax accounting period, (E) adopt or change any method of
Tax accounting, (F) amend any Tax Return, (G) agree to an extension of the
statute of limitations with respect to the assessment or collection of Taxes,
(H) make or surrender any claim for a material refund of Taxes or (I) settle or
compromise any Tax Action, in each case, if such action would have the effect of
increasing a Tax liability or reducing a Tax Asset (including, for the avoidance
of doubt, a deferred Tax liability or deferred Tax Asset, as the case may be) of
the Company or any of its Subsidiaries, in each case for any Post-Closing Tax
Period, by an amount that is material;

       

      (xv)        implement
or adopt any changes with respect to its accounting principles, policies or
practices (other than to the extent required by applicable Laws or changes in US
GAAP);

       

      (xvi)       settle
or compromise any Action, other than as does not involve (i) the admission of
wrongdoing, the institution of mandated new procedures or other business conduct
or the imposition of equitable or similar relief, (ii) is not reasonably likely
to establish an adverse precedent or basis for subsequent Actions or settlements
or (iii) payments in excess of US$50,000 individually or in the
aggregate;

       

      (xvii)      except
(y) as required under the Benefit Plans or any written Contract with any Company
Employee in effect as of the date of this Agreement or (z) as required by
applicable Laws, (A) grant, pay or provide for any severance, change of control
or termination payments or benefits to any of its directors, officers or
employees, (B) increase the salary, bonus, bonus opportunity, pension, welfare
or severance benefits of any of its directors, officers or employees, other than
normal individual increases in the Company Ordinary Course of Business, or (C)
establish, adopt, enter into, amend or terminate any Benefit Plan or amend the
terms of any outstanding equity-based awards;

       

      
        
          
          

        

        
          - 33
-

          
            

          

        

        
          
          

        

      

       

      (xviii)     manage
payables, receivables, current assets, current Liabilities or working capital in
any manner other than in the Company Ordinary Course of Business;

       

      (xix)        enter
into any new line of business outside of its existing business segments or exit
from any existing business;

       

      (xx)         fail
to use commercially reasonable efforts to maintain insurance coverage
substantially similar in all material respects to the insurance coverage
maintained by the Company and its Subsidiaries as of the date
hereof;

       

      (xxi)        discontinue
the employment of the Key Employees or remove any member of the executive
management of the Company, the WFOE, the Hong Kong Company or the Offshore
Company;

       

      (xxii)       enter
into any Affiliate Transaction involving payments in excess of US$50,000 (other than the
employment and non-compete agreements with the Key Employees, as contemplated in
Section 5.1(c) hereof); or

       

      (xxiii)      propose,
authorize or enter into any agreement or otherwise make any commitment to do any
of the foregoing.

       

      (b)           Prior
to the Closing, the Company, the WFOE, the Hong Kong Company and the Offshore
Company shall use their respective best efforts, and the Sellers shall cause the
Company, the WFOE, the Hong Kong Company and the Offshore Company to use their
respective best efforts, to cause the conditions set forth in Article VI to be
satisfied.

       

      (c)           The
Company, the WFOE, the Hong Kong Company and the Offshore Company shall use
their respective best efforts, and the Sellers shall cause the Company, the
WFOE, the Hong Kong Company and the Offshore Company to use their respective
best efforts, to cause the Company to enter into employment and non-compete
agreements with each of the Key Employees prior to the Closing in substantially
the forms set forth in Exhibit E attached hereto; provided that to the
extent any of the Key Employees, other than Shareholder A, ceases to be employed
by any of the Company, its Subsidiaries, the WFOE, the Hong Kong Company or the
Offshore Company before the Closing Date, (i) Shareholder A shall recruit and
cause to be employed by the Company substitute employee(s) of comparable
experience, expertise and seniority, who shall be reasonably satisfactory to the
Purchaser, before the Closing Date and (ii) such substitute employees shall be
considered Key Employees for purposes of this Section 5.1(c) and Section 6.2(i)
hereof.  For the avoidance of doubt, under no circumstances shall
Shareholder A be replaced by any substitute employee for purposes of this
Section 5.1(c) and Section 6.2(i) hereof.

       

      Section
5.2           Escrow
Arrangements.  As soon as practicable following the date
hereof, the Purchaser shall, at its own cost, enter into an escrow agreement (on
terms reasonably acceptable to the Company) with an international bank or a
similar financial institution mutually agreed upon by the Purchaser and the
Sellers (the “Escrow
Agent”) for the benefit of the Sellers with respect to the First Payment
in the following manner:

       

      
        
          
          

        

        
          - 34
-

          
            

          

        

        
          
          

        

      

       

      (i)           the
Purchaser shall deposit the cash and Purchaser Ordinary Shares that are be due
in connection with the First Payment pursuant to Section 2.2(a) hereof in an
escrow account (the “Escrow Account”)
maintained with the Escrow Agent; and

       

      (ii)          the
release of such cash and Purchaser Ordinary Shares from the Escrow Account shall
be subject to the Purchaser’s written confirmation to the Escrow Agent as to the
satisfaction of all conditions to the Closing set forth in Article VI hereof,
with such confirmation to be delivered by the Purchaser (with a copy to the
Sellers) to the Escrow Agent on the Closing Date (subject to the satisfaction of
the terms and conditions set forth in this Agreement).

       

      Section
5.3           Offshore
Reorganization.  As soon as practicable after the date hereof,
the Sellers shall cause the Offshore Reorganization to be duly carried out and
completed in accordance with the Plan of Offshore Reorganization set forth in
Exhibit B attached hereto (for illustrative purposes only, an organizational
chart of the Company, the WFOE, the Hong Kong Company and the Offshore Company
immediately upon the completion of the Offshore Reorganization is also set forth
in Exhibit B).  In connection herewith, the Purchaser may, from time
to time, provide assistance to the Sellers and/or the Company in order for the
Offshore Reorganization to be completed in a timely manner (such assistance may
include specific written instructions and forms of Contracts); provided that the
Sellers and/or the Company shall be under no obligation to accept such
assistance.

       

      Section
5.4           Nasdaq Confirmation;
Shareholder Approval Matters.

       

      (a)           As
soon as practicable after the date hereof, the Purchaser shall submit, or cause
to be submitted to, The Nasdaq Stock Market LLC a written statement (the “Cayman
Certification”), either on behalf of itself or by its Cayman Islands
counsel on the Purchaser’s behalf, certifying that the consummation by the
Purchaser of the transactions contemplated under this Agreement does not require
the approval of the Purchaser’s shareholders under applicable Cayman Islands
Laws.  The Purchaser shall concurrently deliver to the Sellers a copy
of the Cayman Certification.

       

      (b)           In
addition, the Purchaser shall use its commercially reasonable efforts to obtain
confirmation (whether written or oral) from The Nasdaq Stock Market LLC that,
based upon the Cayman Certification, no shareholder approval of the Purchaser is
required to consummate the transactions contemplated under this Agreement (such
exemption from shareholder approval, the “Nasdaq
Exemption”).  The Purchaser shall inform the Sellers, within
twenty (20) Business Days after the submission of the Cayman Certification to
The Nasdaq Stock Market LLC, whether the Nasdaq Exemption has been
obtained.  In the event that the Purchaser informs the Sellers that
the Nasdaq Exemption has not been obtained, the Purchaser shall provide
reasonable evidence (which may be in oral or written form) from the Purchaser’s
counsel or The Nasdaq Stock Market LLC to the Sellers in connection
therewith.

       

      (c)           If
the Purchaser fails to obtain such confirmation, the Purchaser shall (i) take
all necessary steps to hold a shareholders’ meeting in accordance with the
Purchaser’s Organizational Documents in order to seek to obtain the requisite
approval of its shareholders for the transactions contemplated under this
Agreement and (ii) provide to the Sellers and their counsel for prior review the
written materials to be distributed in connection with such shareholders’
meeting.  The Purchaser shall use its commercially reasonable efforts
to obtain such requisite shareholder approval.

       

      
        
          
          

        

        
          - 35
-

          
            

          

        

        
          
          

        

      

       

      Section
5.5           Compliance with U.S.
Securities Laws.  Until the expiration of the applicable
lock-up periods referred to in Section 5.12 hereof, each Seller shall at all
times comply with U.S. Securities Laws in connection with the transactions
contemplated hereunder.  Each of the Sellers acknowledges that as a
result of its receipt of information in connection with the transactions
contemplated by this Agreement, it may be or may be deemed to be in possession
of material non-public information.  Until the expiration of the
applicable lock-up periods referred to in Section 5.12 hereof, each of the
Sellers acknowledges that it is aware of and shall comply with (and will require
its Representatives who are permitted hereunder to receive access to any part of
such information to be advised of and to comply with) any applicable insider
trading Laws in connection with the transactions contemplated hereunder,
including Laws that prohibit any person who has material non-public information
about a company from purchasing or selling securities of that company, or from
communicating that information to any other person under circumstances in which
it is reasonably foreseeable that the other person may purchase or sell any of
those securities while the relevant information remains material and
non-public.

       

      Section
5.6           Post-Closing
Operations.

       

      (a)           Following
the Closing, each of the Company, the WFOE, the Hong Kong Company and the
Offshore Company shall, and Shareholder A and Shareholder B (only in their
capacity as the officers and/or directors of the Company, the WFOE, the Hong
Kong Company and/or the Offshore Company) shall take all actions necessary to
cause each of the Company, the WFOE, the Hong Kong Company and the Offshore
Company to, comply with (i) all applicable Laws and (ii) all corporate
governance, internal control and other policies and procedures of the
Purchaser.

       

      (b)           Subject
to compliance by the Company, the WFOE, the Hong Kong Company and the Offshore
Company with Section 5.6(a) hereof, the parties agree that, from the Closing
Date until January 1, 2011: (i) Shareholder A shall be the chief executive
officer and a member of the board of directors of each of the Offshore Company,
the Hong Kong Company, the WFOE and the Company and the legal representative of
each of the WFOE and the Company; (ii) Shareholder A shall be responsible for
all day-to-day operations of the Offshore Company, the Hong Kong Company, the
WFOE and the Company and shall report directly to the chief executive officer of
the Purchaser; (iii) the Purchaser shall not divert any assets (including cash)
or personnel of any of the Company, the Hong Kong Company, the WFOE or the
Offshore Company existing immediately prior to the Closing towards other
businesses of the Purchaser without the prior consent of the chief executive
officer of such company; and (iv) the Purchaser shall not transfer any
obligation, cost or liability of any other business of the Purchaser to any of
the Company, the WFOE, the Hong Kong Company or the Offshore Company without the
prior consent of the chief executive officer of such company; provided, that in
each case under no circumstances shall the Company, the WFOE, the Hong Kong
Company or the Offshore Company be operated in any manner that would in any way
limit the Purchaser’s ability to fully consolidate such company’s financial
results in the Purchaser’s consolidated financial statements in accordance US
GAAP; and, provided further, that clauses
(i) to (ii) in this Section 5.6(b) shall no longer apply to the extent
Shareholder A is terminated for Cause.

       

      
        
          
          

        

        
          - 36
-

          
            

          

        

        
          
          

        

      

       

      Section
5.7           Cooperation; Approvals and
Consents; Notification.

       

      (a)           Subject
to the terms and conditions set forth hereunder, each party shall cooperate with
each other and use (and shall cause their respective Affiliates to use) their
respective best efforts to take or cause to be taken all actions, and to do or
cause to be done all things, reasonably necessary, proper or advisable on its
part under this Agreement and applicable Laws to consummate as promptly as
practicable the transactions contemplated hereunder, including (i) to prepare
and file as promptly as practicable all documentation to effect all necessary
notices, reports and other filings and to obtain as promptly as practicable all
consents, registrations, approvals, Governmental Authorizations and
authorizations necessary or advisable to be obtained from or renewed with any
third party or Governmental Authority (including the Company Required Regulatory
Approvals, the Company Required Third Party Consents and the Purchaser Required
Regulatory Approvals), in each case in order to consummate as promptly as
practicable the transactions contemplated hereunder and (ii) to furnish as
promptly as practicable all information to any Governmental Authority in
connection with obtaining the Company Required Regulatory Approvals or the
Purchaser Required Regulatory Approvals as may be required by any Governmental
Authority.

       

      (b)           From
the date hereof until the Closing Date, each party shall promptly notify the
other parties of any change or fact of which it is aware that will or is
reasonably expected to result in any of the conditions set forth in Article VI
hereof becoming incapable of being satisfied.

       

      Section
5.8           Access to
Information.  Subject to the confidentiality provisions of
Section 5.9 hereof and without unduly interfering with the normal business of
the Company and its Subsidiaries, from the date hereof and until the earlier of
the Closing Date and the termination of this Agreement in accordance with its
terms, the Sellers shall cause each of the Company, the WFOE, the Hong Kong
Company and the Offshore Company (including their respective Affiliates,
Subsidiaries and Representatives, as applicable) to, (x) instruct its management
personnel to cooperate with the Purchaser and its Representatives during normal
business hours and (y) provide the Purchaser and its Representatives with
reasonable access during normal business hours to, and permit such Persons to
review or consult with, as applicable, their respective facilities, management
teams, properties, contracts, accounts and Company Books and Records, including
the Company IT Systems, and shall provide such other information (including, but
not limited to, business, legal and financial information) with respect to the
Sellers, the Company and its Subsidiaries, the WFOE, the Hong Kong Company, the
Offshore Company and their respective Affiliates and businesses to the Purchaser
and its Representatives as they reasonably request, in order to, among other
things, allow the Purchaser conduct due diligence on the Offshore Reorganization
and verify the number of monthly average peak current users referred to in
Section 6.2(g) hereof.  Without limiting the foregoing, such access
shall include access to information concerning the Company’s business,
properties and Company Employees as the Purchaser may reasonably request
promptly after such request, and shall include all reasonable access requested
by the Purchaser pursuant to any investigation undertaken by the Purchaser to
verify that the representations and warranties of the Sellers and the Company
remain true and correct as of or prior to the Closing Date.  The
Company shall, and the Sellers shall cause the Company, the WFOE, the Hong Kong
Company and the Offshore Company to have ownership and possession of all Company
Books and Records as of the Closing Date.

       

      
        
          
          

        

        
          - 37
-

          
            

          

        

        
          
          

        

      

       

      Section
5.9           Confidentiality.

       

      (a)           Each
party shall keep confidential, and shall procure its Representatives to keep
confidential, and the Sellers shall procure the Company, the WFOE, the Hong Kong
Company and Offshore Company and their respective Representatives to keep
confidential, (x) all information regarding the terms of, or negotiations with
respect to, this Agreement and the transactions contemplated hereunder and (y)
all information provided by another party or their respective Affiliates
relating to any of the parties or any of their respective Affiliates, and the
businesses and operations thereof, whether oral, written or electronic, together
with any reports, analyses, compilations, memoranda, notes and any other written
or electronic materials prepared by a party to this Agreement or by its
Representatives that contain, reflect or are based upon such information
(collectively, “Confidential
Information”), provided, that any
such information may be disclosed (i) to such Person’s Representatives for the
sole purpose of effecting the transactions contemplated by this Agreement (it
being understood that such Person shall cause its Representatives also to keep
such information confidential) and not in a manner that would reasonably be
expected to be detrimental to the disclosing person or (ii) as required by
applicable Laws.  For the purposes of this Section 5.9, Confidential
Information does not include information that (i) is or becomes available to
such party or its Representative on a non-confidential basis, provided, that such
source is not known by such party or its Representative, as the case may be, to
be subject to any legal or contractual obligation to keep such information
confidential, (ii) is or becomes generally available to the public other than as
a result of a disclosure by such Person or by any of its Representatives in
violation of this Section 5.9, (iii) is already in such Person’s or its
Representative’s possession or (iv) is independently developed by such Person or
its Representative (or on its respective behalf) without violating any of such
Person’s obligations under this Section 5.9.

       

      (b)           In
the event that any party, or any of the WFOE, the Hong Kong Company or the
Offshore Company, or any of their respective Representatives or Affiliates is
required by any applicable Laws or Governmental Order to disclose any
Confidential Information, such Person shall, at a reasonable time in advance of
such disclosure, provide all of the other Persons with prompt notice of such
requirement.  To the extent legally permissible, such Person shall
also (i) provide all of the other parties, in advance of any such disclosure,
with a list of any Confidential Information that it intends to disclose (and, if
applicable, the text of the disclosure language itself) and (ii) reasonably
cooperate (at the other Person’s expense) with any other Person to the extent
that such other Person may seek to limit such disclosure, including, if
requested, taking all reasonable steps to resist or avoid the applicable legal
requirement.

       

      Section
5.10         Public
Announcements.  Each party shall consult, and the Sellers shall
cause each of the Company, the WFOE, the Hong Kong Company and the Offshore
Company to consult, with each other prior to issuing any press release regarding
the transactions contemplated by this Agreement or otherwise making public
announcements with respect to the transactions contemplated by this Agreement,
except, in each case, as the Purchaser may determine in good faith is required
to be issued or made by it or any of its Affiliates by applicable Laws or
Governmental Orders, in which case the Purchaser shall use its commercially
reasonable efforts to allow the other parties reasonable time to comment on such
press release or other public announcement in advance of such issuance or
making.

       

      
        
          
          

        

        
          - 38
-

          
            

          

        

        
          
          

        

      

       

      Section
5.11         Company IT
Systems.  As soon as practicable after the date hereof but in
any event prior to the Closing Date, the Sellers, the Company, its Subsidiaries,
the WFOE, the Hong Kong Company and/or the Offshore Company shall use their
commercially reasonable efforts to take or cause to be taken all actions, and do
or cause to be done all things, necessary to maintain the Company IT
Systems.

       

      Section
5.12         Transfer
Restrictions.

       

      (a)           Shareholder A and
Shareholder
B.  Without the prior written consent of the Purchaser, neither
Shareholder A nor Shareholder B shall, directly or indirectly, sell, contract to
sell, assign, pledge, convey, lend, hypothecate, grant any option to purchase,
purchase any option to sell, make any short sale or otherwise encumber or
dispose of (including entering into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
interests) (each a “Transfer”) any of the
Purchaser Ordinary Shares received by such Seller in connection with the
transactions contemplated by this Agreement: (i) with respect to the First
Payment, for a period of eighteen (18) months after the receipt of such
Purchaser Ordinary Shares; (ii) with respect to the Second Payment, for a period
of twelve (12) months after the receipt of such Purchaser Ordinary Shares; and
(iii) with respect to the Third Payment, for a period of six (6) months after
the receipt of such Purchaser Ordinary Shares.

       

      (b)           Other
Sellers. Without the prior written consent of the Purchaser, none of
the Sellers, other than Shareholder A and Shareholder B, shall Transfer any of
the Purchaser Ordinary Shares received by such Seller in connection with the
transactions contemplated by this Agreement for a period of six (6) months after
the receipt of such Purchaser Ordinary Shares.

       

      Section
5.13         Rule 144
Sales.

       

      (a)           Shareholder
A.  With respect to any sales by Shareholder A of the Purchaser
Ordinary Shares received by Shareholder A in connection with the transactions
contemplated by this Agreement that are effected in compliance with this
Agreement, the Purchaser shall use commercially reasonable efforts to provide
Shareholder A with the same type of assistance that, the Purchaser provides to
its executive officers in connection with any sales, pursuant to Rule 144
under the Securities Act as of the date hereof; provided, that the
Purchaser shall not be obligated to register such Purchaser Ordinary Shares
under the Securities Act under any circumstances; and provided further that
Shareholder A shall reimburse the Purchaser for all third party costs incurred
in connection with providing such assistance.

       

      (b)           Other
Sellers.  With respect to any sales by any of the Sellers,
other than Shareholder A, of the Purchaser Ordinary Shares received by such
Seller in connection with the transactions contemplated by this Agreement
that are effected in compliance with this Agreement, the Purchaser shall, at the
request of such Seller, use commercially reasonable efforts to assist such
Seller in connection with any sales (such assistance shall include, if
necessary, instructing the Purchaser’s transfer agent to remove any restrictive
legends after the receipt of any necessary opinions of counsel and
certifications of such Seller), pursuant to Rule 144 under the Securities Act as
of the date hereof; provided that the
Purchaser shall not be obligated to register such Purchaser Ordinary Shares
under the Securities Act under any circumstances; and provided further that such
Seller shall reimburse the Purchaser for all third party costs incurred in
connection with providing such assistance.

       

      
        
          
          

        

        
          - 39
-

          
            

          

        

        
          
          

        

      

       

      Section
5.14         Notice.  The
Sellers and/or the Company shall promptly notify the Purchaser of any written
notice or other communication from any counterparty to any Company Material
Contract to the effect that such counterparty is terminating or otherwise
materially and adversely modifying its relationship with the Company or any of
its Subsidiaries, or contemplating taking any such action, as a result of the
transactions contemplated hereunder.

       

      Section
5.15         Transfer of Equity
Interest.  Without the prior written consent of the Purchaser,
none of the Sellers shall Transfer any of its Company Equity Interests held as
of the date hereof except to the extent contemplated under this Agreement and/or
the Plan of Offshore Reorganization.  Without the prior written
consent of the Purchaser, following the consummation of the Offshore
Reorganization, none of the Sellers shall Transfer its Offshore Company Shares
received in connection with the Offshore Reorganization except in accordance
with Article II of this Agreement.

       

      Section
5.16         No
Solicitation.  Until the Closing or the termination of this
Agreement, none of the Sellers, the Company, the WFOE, the Hong Kong Company or
the Offshore Company nor their respective Subsidiaries, Affiliates,
Representatives, employees or members of the board of directors shall: (a)
solicit, initiate, entertain, accept or encourage the submission of any proposal
or offer from any Person relating to the direct or indirect acquisition of the
equity or other interests of the Company, the WFOE, the Hong Kong Company or the
Offshore Company; or (b) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any Person to do or seek
any of the foregoing.  Each of the Sellers, the Company, the WFOE, the
Hong Kong Company and the Offshore Company shall immediately notify the
Purchaser orally and in writing if any Person makes any proposal, offer, inquiry
or contact with respect to any of the foregoing.

       

      Section
5.17         Board of
Directors.  The Sellers shall procure (i) the resignation of
each member of the board of directors, except Shareholder A, of each of the
Company, the WFOE, the Hong Kong Company and the Offshore Company and (ii) the
appointment of Persons designated by the Purchaser to the board of directors of
each of the Company, the WFOE, the Hong Kong Company and the Offshore Company,
in each case effective as of the Closing.

       

      Section
5.18         Tax
Matters.  The Sellers shall indemnify the Purchaser in
accordance with Article IX for any deficiency in payment of Taxes, as determined
by or at the request of any Governmental Authority, incurred prior to the
Closing Date by any of the Company, its Subsidiaries, the WFOE, the Hong Kong
Company and the Offshore Company to the extent that such deficiency has been
remedied by the Purchaser.  For the avoidance of doubt, Taxes that
have not been paid but for which adequate reserves have been established in the
First Half 2010 Financial Statements or the 2010 Financial Statements shall not
be considered to be a deficiency for purposes of this Section 5.18.

       

      Section
5.19         Breach by the WFOE, the Hong
Kong Company or the Offshore Company.  For the avoidance of
doubt, any breach and/or nonfulfillment prior to the Closing of any covenant,
agreement and/or obligation of any of the WFOE, the Hong Kong Company and the
Offshore Company contained in this Article V shall be deemed to be a breach
and/or nonfulfillment of such covenant, agreement and/or obligation by the
Sellers.

       

      
        
          
          

        

        
          - 40
-

          
            

          

        

        
          
          

        

      

       

      ARTICLE
VI

       

      CONDITIONS TO
CLOSING

       

      Section
6.1           Conditions to Obligations of
the Purchaser and the Sellers.  The respective obligations of
each party to effect the Purchase are subject to the satisfaction or waiver at
or prior to the Closing of each of the following conditions:

       

      (a)           No Prohibitive
Order.  No court or other Governmental Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
Law or Governmental Order (whether temporary, preliminary or permanent) that is
in effect and prevents, restrains, enjoins or otherwise prohibits the
consummation of the Purchase (a “Prohibitive
Order”).

       

      Section
6.2           Conditions to Obligations of
the Purchaser.  The obligations of the Purchaser to effect the
Purchase are subject to the satisfaction or waiver by the Purchaser at or prior
to the Closing of each of the following further conditions:

       

      (a)           Representations and
Warranties of the Sellers and the Company.  The representations
and warranties of the Sellers (including those made by the Sellers in respect of
the WFOE, the Hong Kong Company and the Offshore Company) and the Company, set
forth in this Agreement shall be true and correct (which representations and
warranties shall be deemed for the purposes of this Section 6.2(a) not to
include any qualification or limitation with respect to “materiality” or
“Material Adverse Effect” set forth therein) as of the date of this Agreement
and as of the Closing Date as though made on and as of such date (except to the
extent that any such representation or warranty expressly speaks as of an
earlier or later date, in which case such representation or warranty shall be
true and correct as of such earlier or later date); provided, however, that the
condition set forth in this Section 6.2(a) shall be deemed to have been
satisfied even if any representations or warranties of the Sellers (including
those made by the Sellers in respect of the WFOE, the Hong Kong Company and/or
the Offshore Company) and the Company (other than those contained in Section 3.1
and Section 3.5 (Authorization of Transaction; Binding Obligation), Section 3.29
(Authorization of Transaction), Section 3.3 (Title to the Shares), Section 3.9
(Company Equity Interests) and Section 3.33 (Equity Interests) which must be
true and correct in all respects) are not so true and correct, unless the
failure of such representations and warranties of the Sellers (including those
made by the Sellers in respect of the WFOE, the Hong Kong Company and/or the
Offshore Company) and the Company to be so true and correct, individually or in
the aggregate, has had or is reasonably likely to have a Material Adverse
Effect.  The Purchaser shall have received a certificate, dated as of
the Closing Date, signed by each of the Sellers and an executive officer of the
Company to such effect.

       

      (b)           Performance of Obligations
of the Sellers, the Company, the WFOE, the Hong Kong Company and the Offshore
Company.  Each of the Sellers, the Company, the WFOE, the Hong
Kong Company and the Offshore Company shall have performed in all material
respects all obligations required to be performed by it hereunder on or prior to
the Closing Date, and the Purchaser shall have received a certificate, dated as
of the Closing Date, signed by each of the Sellers and by an executive officer
of each of the Company, the WFOE, the Hong Kong Company and the Offshore Company
to such effect.

       

      
        
          
          

        

        
          - 41
-

          
            

          

        

        
          
          

        

      

       

      (c)           Absence of Material Adverse
Effect.  There shall not have occurred any Material Adverse
Effect.  The Purchaser shall have received a certificate, dated as of
the Closing Date, signed by Shareholder A to such effect.

       

      (d)           Nasdaq
Confirmation.  The Nasdaq Exemption shall have bee obtained or
the shareholders of the Purchaser shall have approved the transactions
contemplated by this Agreement in accordance with Section 5.4
hereof.

       

      (e)           Offshore
Reorganization.  The Offshore Reorganization shall have been
duly carried out and completed in accordance with the Plan of Offshore
Reorganization (and the Offshore Reorganization Regulatory Approvals
contemplated therein shall have been obtained and shall remain in full force and
effect) and due diligence relating to the Offshore Reorganization shall have
been completed by the Purchaser, in each case, to the satisfaction of the
Purchaser in its sole discretion.

       

      (f)           Opinion of PRC
Counsel.  The Purchaser shall have received a legal opinion of
its PRC counsel or PRC counsel to the Sellers, dated as of the Closing Date, in
substantially the form attached hereto as Exhibit C as to
certain matters under PRC Laws, including the compliance of the transactions
contemplated by this Agreement and the Offshore Reorganization with applicable
PRC Laws.

       

      (g)           Opinion of Cayman
Counsel.  The Purchaser shall have received a legal opinion of
its Cayman Islands counsel or Cayman Islands counsel to the Sellers, dated as of
the Closing Date, in substantially the form attached hereto as Exhibit D as to
certain matters under Cayman Islands Laws, including the compliance of the
transactions contemplated by this Agreement with applicable Cayman Islands
Laws

       

      (h)           Average Peak Concurrent
Users.  The monthly average peak concurrent users within the
PRC for the Company’s “龙 (Loong)” game
during the period from November 1, 2009 to the Closing Date shall have been no
less than 30,000.  (The monthly average peak current users of a
particular month shall be calculated by dividing (i) the sum of the peak
concurrent users of each day of the month by (ii) the number of days in that
month.)  The Purchaser shall have received a certificate, dated as of
the Closing Date, signed by an executive officer of the Company to such
effect.

       

      (i)           Key
Employees.  The Company shall have entered into employment and
non-compete agreements with the Key Employees in accordance with Section 5.1(c)
hereof.

       

      (j)           Board of
Directors.  Each member of the board of directors, except
Shareholder A, of each of the Company, the WFOE, the Hong Kong Company and the
Offshore Company shall resign, and Persons designated by the Purchaser shall be
appointed to the board of directors of each of the Company, the WFOE, the Hong
Kong Company and the Offshore Company, in each case effective as of the
Closing.


      
        
           


        

        
          - 42
-

          
            

          

        

        
           


        

      

    

     

    Section
6.3           Conditions to Obligations of
the Sellers.  The obligations of the Sellers to effect the
Purchase are subject to the satisfaction or waiver by the Sellers at or prior to
the Closing of each of the following further conditions:

     

    (a)           Representations and
Warranties of Purchaser.  The representations and warranties of
the Purchaser set forth in this Agreement shall be true and correct (which
representations and warranties shall be deemed for the purposes of this Section
6.3(a) not to include any qualification or limitation with respect to
“materiality” set forth therein) as of the date of this Agreement and as of the
Closing Date as though made on and as of such date (except to the extent that
any such representation or warranty expressly speaks as of an earlier or later
date, in which case such representation or warranty shall be true and correct as
of such earlier or later date); provided, however, that the
condition set forth in this Section 6.3(a) shall be deemed to have been
satisfied even if any representations or warranties of the Purchaser are not so
true and correct, unless the failure of such representations and warranties of
the Purchaser to be so true and correct is, individually or in the aggregate,
reasonably likely to prevent, materially delay or materially impair the ability
of the Purchaser to consummate the transactions contemplated by this
Agreement.  The Sellers shall have received a certificate, dated as of
the Closing Date, signed by an executive officer of the Purchaser on behalf of
the Purchaser to such effect.

     

    (b)           Performance of Obligations
of the Purchaser.  The Purchaser shall have performed in all
material respects all obligations required to be performed by it hereunder on or
prior to the Closing Date, and the Sellers shall have received a certificate,
dated as of the Closing Date, signed by an executive officer of the Purchaser to
the effect that the conditions set forth in this Section 6.3(b) have been
satisfied.

     

    (c)           Release of Escrow.
The Purchaser shall have provided the Sellers with a copy of the written
confirmation to the Escrow Agent authorizing release of the First Payment as
contemplated by Section 5.2 hereof.

     

    ARTICLE
VII

     

    ACCELERATION OF CONTINGENT
PAYMENTS

     

    Section
7.1           Acceleration of Contingent
Payments.  If, at any time after the Closing Date, but prior to
January 1, 2011, Shareholder A is no longer the chief executive officer of the
Company, the WFOE, the Hong Kong Company and the Offshore Company, other than
due to his termination for Cause, the Second Payment (if any) and the Third
Payment (if any), to the extent not already paid, shall become immediately due
and payable to the Sellers.

     

    Section
7.2           Valuation upon
Acceleration.  In the event the Third Payment (if any) is
accelerated pursuant to Section 7.1 hereof, the Valuation for purpose of the
Third Payment shall be deemed to be US$80,000,000.

     

    Section
7.3           Termination for
Cause.  Section 7.1 and Section 7.2 above shall become void and
of no effect to the extent Shareholder A has been terminated for
Cause.

     

    
      
        
           


        

        
          - 43
-

          
            

          

        

        
           


        

      

    

     

    ARTICLE
VIII

     

    TERMINATION

     

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

     

    (a)           by
mutual written consent of the Sellers and the Purchaser;

     

    (b)           by
either the Purchaser or Shareholder A (on behalf of the Sellers) if (i) the
Closing shall not have occurred on or prior to April 30, 2010 (the “Termination Date”) or
(ii) any Prohibitive Order permanently preventing, restraining, enjoining or
otherwise prohibiting the consummation of the Purchase shall have become final
and non-appealable, provided, that in
each case of the foregoing clauses (i) and (ii) of this Section 8.1(b), the
right to terminate this Agreement pursuant to this Section 8.1(b) shall not be
available to any party hereto seeking to terminate this Agreement if the failure
of the Closing to occur on or prior to the Termination Date, the failure of a
condition to the consummation of the Purchase to be satisfied or the occurrence
of any Prohibitive Order was primarily due to the failure of such party to
perform in any material respect its obligations under this
Agreement;

     

    (c)           by
Shareholder A (on behalf of the Sellers), if the Purchaser has breached in any
material respect any representations, warranties, covenants or agreement made by
the Purchaser in this Agreement, or any representation or warranty shall become
untrue after the date hereof, in either case such that the conditions set forth
in Section 6.1 and Section 6.3(a) or Section 6.3(b) would not be satisfied and
such breach is not curable, or if curable, has not been cured within 30 (thirty)
days after written notice thereof is given by the Sellers to the Purchaser;
and

     

    (d)           by
the Purchaser, if any of the Sellers, the Company, the WFOE, the Hong Kong
Company and the Offshore Company has breached in any material respect any
representations, warranties, covenants or agreement made by such Person in this
Agreement, or any representation or warranty shall become untrue after the date
hereof, in either case such that the conditions set forth in Section 6.1 and
Section 6.3(a) or Section 6.3(b) would not be satisfied and such breach is not
curable, or if curable, has not been cured within 30 (thirty) days after written
notice thereof is given by the Purchaser to Shareholder A (on behalf of
Sellers).

     

    Section
8.2           Effect of
Termination.  In the event of a termination of this Agreement
pursuant to this Article VIII, this Agreement shall become void and of no
effect, with no liability to any Person on the part of any party hereto (or of
any of its Representatives or Affiliates), provided, that (x) the provisions of
Section 5.9 (Confidentiality) and Section 5.10 (Public Announcement)
hereof, this Section 8.2, Article X hereof and relevant definitional
provisions of Article I hereof shall survive any termination of this Agreement,
and (y) nothing herein shall relieve any party hereto from any liability or
damages to the other party hereto accrued prior to such
termination.

     

    
      
        
           


        

        
          - 44
-

          
            

          

        

        
           


        

      

    

     

    ARTICLE
IX

     

    INDEMNIFICATION

     

    Section
9.1           Survival of Representations
and Warranties.  The representations and warranties of the
parties contained hereunder shall survive for two (2) years after the Closing,
except for (a) the representations and warranties set forth in Section 3.1 (Authorization of
Transaction; Binding Obligation), Section 3.3 (Title to Shares), Section 3.5
(Authorization of Transaction; Binding Obligation), Section 3.6 (Organization),
Section 3.9 (Company Equity Interests), Section 3.12 (Taxes) (and the
corresponding representations and warranties by the WFOE, the Hong Kong Company
and the Offshore Company), Section 3.14(d) and Section 3.14(e) (Employee
Benefits) (and the corresponding representations and warranties by the WFOE, the
Hong Kong Company and the Offshore Company), Section 3.29 (Authorization of
Transaction), Section 3.30 (Organization) and Section 3.33 (Equity Interests),
which shall survive indefinitely, provided, that any claim made by the party
hereto seeking to be indemnified within such specified period shall survive
until such claim is finally resolved.

     

    Section
9.2           Indemnification.

     

    (a)           Each
of the Sellers shall severally, but not jointly, indemnify and hold harmless the
Purchaser and its Affiliates and their respective directors, officers,
employees, agents, successors and assigns (each, a “Purchaser Indemnified
Party”) for and against all Losses suffered or incurred by them in
connection with, arising out of or resulting from, (i) any breach or
inaccuracy of any representation or warranty made by such Seller in Sub-Article
A of Article III or (ii) any breach or nonfulfillment by such Seller of any
covenant, agreement or obligation on the part of such Seller contained in
Section 5.5 (Compliance with U.S. Securities Laws), Section 5.12 (Transfer
Restrictions) and Section 5.15 (Transfer of Equity Interest).

     

    (b)           Each
of the Sellers shall, severally and jointly, indemnify and hold harmless the
Purchaser Indemnified Parties for and against all Losses suffered or incurred by
them in connection with, arising out of or resulting from, (i) any breach
or inaccuracy of any representation or warranty made by the Sellers and/or the
Company in Sub-Articles B and C of Article III (including any representation
and/or warranty made by any of the Sellers in respect of any of the WFOE, the
Hong Kong Company and/or the Offshore Company) or (ii) any breach or
nonfulfillment by any of the Sellers, the Company, the WFOE, the Hong Kong
Company or the Offshore Company of any covenant, agreement or obligation on the
part of the Sellers, the Company, the WFOE, the Hong Kong Company or the
Offshore Company contained in this Agreement (it being understood and agreed
that any breach and/or nonfulfillment prior to the Closing of any covenant,
agreement and/or obligation hereunder of any of the WFOE, the Hong Kong Company
and the Offshore Company shall be deemed to be a breach and/or nonfulfillment of
such covenant, agreement and/or obligation by the Sellers), except those
contained in Section 5.5 (Compliance with U.S. Securities Laws), Section 5.12
(Transfer Restrictions), Section 5.15 (Transfer of Equity Interest) and Section
5.6(a) (Post-Closing Operations) for which each Seller, as applicable, shall be
severally but not jointly liable to the Purchaser Indemnified
Parties.

     

    (c)           Each
of the Sellers agrees that, after the Closing, none of them may seek recovery
against the Company, the WFOE, the Hong Kong Company or the Offshore Company
pursuant to any theory of subrogation, contribution or otherwise of any Losses
payable for any such breach, inaccuracy or nonfulfillment by the Company, the
WFOE, the Hong Kong Company or the Offshore Company.

     

    
      
        
        

      

      
        - 45
-

        
          

        

      

      
        
        

      

    

     

    (d)           The
Purchaser shall indemnify and hold harmless the Sellers and its Affiliates
(which, after the Closing, shall not include, for purposes of this Section
9.2(d), the Company, the WFOE, the Hong Kong Company and the Offshore Company)
and their respective directors, officers, employees, agents, successors and
assigns (each, a “Seller Indemnified
Party”) for and against all Losses suffered or incurred by them in
connection with, arising out of or resulting from, (i) any breach or
inaccuracy of any representation or warranty made by the Purchaser in this
Agreement or (ii) any breach or nonfulfillment by the Purchaser of any
covenant, agreement or obligation on the part of the Purchaser contained in this
Agreement.

     

    Section
9.3           Limitations on
Indemnification.  Notwithstanding anything to the contrary
contained in this Agreement:

     

    (a)           an
Indemnifying Party shall not be liable for any claim for indemnification
pursuant to Section 9.2(a), Section 9.2(b) or Section 9.2(d) hereof, unless and
until the aggregate amount of indemnifiable Losses that may be recovered from
the Indemnifying Party pursuant to Section 9.2(a), Section 9.2(b) or Section
9.2(d) hereof equals or exceeds US$100,000 (the “Basket Amount”) (it
being understood that (i) once the Basket Amount has been reached or exceeded,
the Indemnifying Party shall be liable for all indemnifiable Losses, including
those Losses that may not be indemnifiable before the Basket Amount is reached;
and (ii) any shortfall in the First Payment, the Second Payment (if any) or the
Third Payment (if any) from the Purchaser shall not be subject to the limitation
of the Basket Amount set forth in this Section 9.3(a));

     

    (b)           the
maximum aggregate amount of indemnifiable Losses that may be recovered from each
Seller under Section 9.2(a) and Section 9.2(b) hereof shall be an amount equal
to the sum of the First Payment, the Second Payment (if any) and the Third
Payment (if any) actually paid to such Seller; provided that the
Purchaser shall allocate any indemnifiable Losses pursuant to Section 9.2(b)
hereof among the Sellers on a pro rata basis in proportion to each Seller’s
percentage ownership interest in the Offshore Company as of the Closing
Date;

     

    (c)           the
maximum aggregate amount of indemnifiable Losses that may be recovered from the
Purchaser under Section 9.2(d) hereof shall not exceed the difference between
(i) US$80,000,000 and (ii) the sum of the First Payment, the Second Payment (if
any) and the Third Payment (if any) to the extent that such payments are made to
the Sellers; and

     

    (d)           
the Sellers shall have no obligation to indemnify the Purchaser for and against
any Losses suffered or incurred by the Purchaser in connection with, arising out
of or resulting from, the Sellers’ and/or the Company’s compliance with specific
written instructions and/or use of forms of Contracts supplied by the Purchaser
in connection with the Offshore Reorganization;

     

    Section
9.4           Notice of Loss; Third Party
Claims.

     

    (a)           Other
than with respect to any Third Party Claim (as defined below) that is provided
for in Section 9.4(b) hereof, an Indemnified Party shall give the Indemnifying
Party notice of any matter that an Indemnified Party has determined has given
rise to a right of indemnification under this Article IX, within thirty
(30) days of such determination, provided, that the
failure to provide such notice shall not release the Indemnifying Party from any
of its obligations under this Article IX except to the extent that the
Indemnifying Party is materially prejudiced by such failure.

     

    
      
        
        

      

      
        - 46
-

        
          

        

      

      
        
        

      

    

     

    (b)           If
an Indemnified Party shall receive notice of any Action, audit, claim, demand or
assessment against it that may give rise to a claim for Losses under this
Article IX (each, a “Third Party Claim”),
within thirty (30) days of the receipt of such notice, the Indemnified Party
shall give the Indemnifying Party notice of such Third Party Claim, provided, that the
failure to provide such notice shall not release the Indemnifying Party from any
of its obligations under this Article IX except to the extent that the
Indemnifying Party is materially prejudiced by such failure.  The
Indemnifying Party shall be entitled, subject to the Indemnified Party’s consent
and to the extent permitted by applicable Laws, to assume and control the
defense of such Third Party Claim at its expense and through counsel of its
choice, if it promptly (at least ten (10) days before a response to such Third
Party Claim is due) gives notice of its intention to do so to the Indemnified
Party, and if it so elects, the Indemnifying Party shall not be liable to the
Indemnified Party for legal expenses subsequently incurred by the Indemnified
Party in connection with the defense thereof, but the Indemnifying Party shall
allow the Indemnified Party a reasonable opportunity to participate in the
defense of such Third Party Claim with its own counsel and at its own
expense.

     

    (c)           Notwithstanding
the foregoing, if the actual or potential defendants in, or targets of, such
Third Party Claim include both the Indemnifying Party and the Indemnified Party,
and the Indemnified Party shall have reasonably concluded that there are or are
reasonably likely to be legal defenses available to it that are different from
or additional to those available to the Indemnifying Party or that there exists
or is reasonably likely to exist a conflict of interest, in either case that
would make it inappropriate in the reasonable judgment of the Indemnified Party
for the same counsel to represent both the Indemnified Party and the
Indemnifying Party, then the Indemnified Party shall be entitled to participate
in the defense of such Third Party Claim with its own counsel (but at the
Indemnifying Party’s expense), provided, that the
Indemnified Party shall use diligent and good faith efforts in such
defense.

     

    (d)           The
Indemnified Party shall cooperate with the Indemnifying Party in the defense and
settlement of any Third Party Claim which is indemnifiable hereunder and make
available to the Indemnifying Party all witnesses, pertinent records, materials
and information in the Indemnified Party’s possession or under the Indemnified
Party’s control relating thereto as is reasonably required by the Indemnifying
Party.

     

    (e)           If
the Indemnifying Party does not assume control over the defense of any Third
Party Claim which is indemnifiable hereunder as provided in Section 9.4(b)
hereof, then the Indemnified Party shall have the right to defend such Third
Party Claim at the Indemnifying Party’s expense, and the portion of any such
Third Party Claim as to which the defense by the Indemnified Party is
unsuccessful shall be a liability of the Indemnifying Party hereunder, provided, that if the
Indemnifying Party shall have admitted that it has a duty to fully indemnify any
Indemnified Party with respect to a Third Party Claim pursuant to this Article
IX and such Indemnifying Party has requested the Indemnified Party take over the
defense and such Indemnified Party does elect to assume the defense of such
Third Party Claim, such Indemnified Party shall use diligent and good faith
efforts in its defense of such Third Party Claim and not settle or compromise
such Third Party Claim without obtaining the prior written consent of the
Indemnifying Party.  The Indemnified Party shall not pay, or permit to
be paid, any part of such Third Party Claim unless the Indemnifying Party
consents in writing to such payment or unless a final judgment from which no
appeal may be taken by or on behalf of the Indemnifying Party has been entered
against the Indemnified Party for such Third Party Claim.

     

    
      
        
           


        

        
          - 47
-

          
            

          

        

        
           


        

      

    

     

    (f)           The
Indemnifying Party shall be authorized to consent to a settlement of, or the
entry of any judgment arising from, any Third Party Claim of which it has
assumed control as provided in Section 9.4(b) hereof, without the consent of any
Indemnified Party, provided, that the
Indemnifying Party shall (i) pay or cause to be paid all amounts arising out of
such settlement or judgment concurrently with the effectiveness of such
settlement or judgment, (ii) not encumber any of the assets of any Indemnified
Party or agree to any restriction or condition that would apply to or materially
and adversely affect any Indemnified Party or the conduct of any Indemnified
Party’s businesses, (iii) obtain, as a condition of any settlement or judgment
or other resolution, a complete release of any Indemnified Party potentially
affected by such Third Party Claim, and (iv) ensure that such settlement or
judgment does not include any admission of wrongdoing or
misconduct.

     

    Section
9.5           Mitigation;
Adjustments.

     

    (a)           Each
Indemnified Party shall use its reasonable efforts to mitigate any Losses under
this Article IX.

     

    (b)           In
calculating the amount of any Loss, the proceeds actually received by the
Indemnified Party or any of its Affiliates under any insurance policy or
pursuant to any claim, recovery, settlement or payment by or against any other
Person, net of any actual costs, expenses or premiums incurred in connection
with securing or obtaining such proceeds (including the amount of such proceeds
received by the Indemnified Party or any of its Affiliates after payment has
been made by the Indemnifying Party to the Indemnified Party pursuant to this
Article IX) shall be deducted, and to the extent of the amount of any such
proceeds that is received by the Indemnified Party or any of its Affiliates
after payment has been made by the Indemnifying Party to the Indemnified Party
pursuant to this Article IX and has not been deducted from the calculation of
the Losses, such amount shall be paid by the Indemnified Party to the
Indemnifying Party as promptly as practicable.  No Indemnifying Party
shall be entitled to seek recovery against an Indemnified Party or its
Affiliates pursuant to any theory of subrogation, contribution or otherwise of
any Losses payable to such an Indemnified Party, provided, that the
Indemnifying Party shall be entitled to seek recovery against an Indemnified
Party or its Affiliates in the event that the Indemnified Party or its
Affiliates fail to deduct the proceeds in the calculation of the amount of any
Loss or fail to pay to the Indemnifying Party the amount of such proceeds that
is received after payment has been made by the Indemnifying Party pursuant to
this Article IX.

     

    (c)           If
an Indemnified Party recovers an amount from a third party (other than any
Affiliate of such Indemnified Party) in respect of a Loss that is the subject of
indemnification hereunder after all or a portion of such Loss has been paid by
an Indemnifying Party pursuant to this Article IX, the Indemnified Party shall
promptly remit to the Indemnifying Party the excess (if any) of (i) the amount
paid by the Indemnifying Party in respect of such Loss, plus such amount
received by the Indemnified Party in respect thereof, less (ii) the full amount
of such Loss.

     

    
      
        
           


        

        
          - 48
-

          
            

          

        

        
           


        

      

    

     

    Section
9.6           Payments.

     

    (a)           The
Indemnifying Party shall pay all amounts payable pursuant to this Article IX, by
wire transfer of immediately available funds, promptly following receipt from an
Indemnified Party of a bill, together with reasonably detailed back-up
documentation, for a Loss that is the subject of indemnification hereunder,
unless the Indemnifying Party in good faith disputes the Loss, in which event it
shall so notify the Indemnified Party.  In any event, the Indemnifying
Party shall pay to the Indemnified Party, by wire transfer of immediately
available funds, the amount of any Loss for which it is liable hereunder no
later than ten (10) days following any final determination of such Loss and the
Indemnifying Party’s liability therefor.  A “final determination”
shall exist when (i) the parties to the dispute have reached an agreement in
writing, (ii) a court of competent jurisdiction shall have entered a final and
non-appealable order or judgment, or (iii) an arbitration or like panel shall
have rendered a final and non-appealable determination with respect to disputes
the parties have agreed to submit thereto.

     

    (b)           Notwithstanding
the foregoing, upon a final determination of any such indemnifiable Loss that
has actually accrued under Section 9.2(a) or Section 9.2(b) hereof, the
Purchaser has the option, but not the obligation, to deduct the amount of such
indemnifiable Loss from the Second Payment (if any) and/or the Third Payment (if
any) payable to the Sellers, to the extent not already paid to the Sellers (as
the Indemnifying Parties).  Any such deductions of indemnifiable
Losses from the Second Payment and/or the Third Payment, as applicable, shall be
made on a pro rata basis in proportion to each Seller’s percentage ownership
interest in the Offshore Company as of the Closing Date.

     

    (c)           All
payments made under this Article IX by an Indemnifying Party shall be made in
full without any restriction or condition, and free and clear of any Taxes,
deductions or withholdings of any nature.  Where any such Taxes,
deductions or withholdings are required by applicable Laws, the amount of the
payment shall be increased so that the amount received by the Indemnified Party
shall (net of any such Taxes, withholdings or deductions) equal the full amount
of the payment that would have been received by the Indemnified Party if no
Taxes, deductions or withholdings were applicable.

     

    Section
9.7           Exclusive
Remedy.  From and after the Closing: (a) this Article IX shall
be the exclusive remedy of the parties hereto for any Losses suffered or
incurred by them in connection with, arising out of or resulting from, the
breach of the representations, warranties, covenants or agreements contained in
this Agreement; and (b) each of the parties hereto hereby waives, to the fullest
extent permitted under applicable Law, any and all rights, claims and causes of
action (other than with respect to willful misconduct or fraud) it may have
against the other parties hereto, arising under or based upon any Law or
Governmental Order, other than the right to seek indemnity pursuant to this
Article IX.

     

    ARTICLE
X

     

    MISCELLANEOUS

     

    Section
10.1         Notices.  Any
notice, request, instruction or other document to be given hereunder by any
party to the other will be in writing and will be deemed to have been duly given
(a) upon delivery when delivered personally, (b) upon receipt of telephonic or
electronic confirmation when delivered by facsimile, or (c) upon dispatch
if delivered by a recognized next-day courier service.  All notices
hereunder shall be delivered as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice.

     

    
      
        
        

      

      
        - 49
-

        
          

        

      

      
        
        

      

    

     

    
      
        	 	
                (A)           If
      to the Sellers to:

              
	 	 
      	
                c/o Shanghai Dacheng
      Network Technology Co., Ltd.

              
	 	 
      	
                5th
      Floor, No. 168 Tianshan Zhi Lu

              
	 	 
      	
                Changning
      District

              
	 	 
      	
                Shanghai
      200051

              
	 	 
      	
                The
      People’s Republic of China

              
	 	 
      	
                Attention:
      Zhen YANG

              
	 	 
      	
                Facsimile:
      (+86-21) 6145-4819

              


      

    

     

    
      
        
          	 	
                  (B)           If
      to the Company, to:

                
	 	 
      	
                  Shanghai
      Dacheng Network Technology Co., Ltd.

                
	 	 
      	
                  5th
      Floor, No. 168 Tianshan Zhi Lu

                
	 	 
      	
                  Changning
      District

                
	 	 
      	
                  Shanghai
      200051

                
	 	 
      	
                  The
      People’s Republic of China

                
	 	 
      	
                  Attention:
      Zhen YANG

                
	 	 
      	
                  Facsimile:
      (+86-21) 6145-4819

                
	 	 
      	 
      
	 	
                  with
      a copy to:

                
	 	 
      	
                  Weil,
      Gotshal & Manges LLP

                
	 	 
      	
                  Plaza
      66, Tower 2, 38th
      Floor

                
	 	 
      	
                  1366
      Nanjing West Road

                
	 	 
      	
                  Shanghai
      200040

                
	 	 
      	
                  The
      People’s Republic of China

                
	 	 
      	
                  Attention:
      Anthony Wang

                
	 	 
      	
                  Facsimile:
      (+86-21) 6288-3866

                


        

      

    

     

    
      
        	 	
                (E)           If
      to the Purchaser, to:

              
	 	 
      	
                KongZhong
      Corporation

              
	 	 
      	
                35th
      Floor, Tengda Plaza

              
	 	 
      	
                No.
      168 Xizhimenwai Street

              
	 	 
      	
                Beijing
      100044

              
	 	 
      	
                The
      People’s Republic of China

              
	 	 
      	
                Attention:
      Chief Investment Officer

              
	 	 
      	
                Facsimile:
      (+86-10) 8857-5891

              
	 	 
      	 
      
	 	
                with
      a copy to:

              
	 	 
      	
                Sullivan
      & Cromwell LLP

              
	 	 
      	
                Tower
      1, Suite 501

              
	 	 
      	
                China
      World Trade Center

              
	 	 
      	
                One
      Jian Guo Men Wai Ave

              
	 	 
      	
                Beijing
      100004

              
	 	 
      	
                The
      People’s Republic of China

              
	 	 
      	
                Attention:
      William Y. Chua

              
	 	 
      	
                Facsimile:
      (+86-10) 5923-5950

              


      

    

    


    
      
        
        

      

      
        - 50
-

        
          

        

      

      
        
        

      

    

     

    Section
10.2         Amendments and
Waivers.  Any provision of this Agreement may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed, in
the case of an amendment, by each party to this Agreement, or in the case of a
waiver, by the party hereto against whom the waiver is to be
effective.  Any waiver of any term or condition shall not be construed
as a waiver of any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition of this
Agreement.  No failure or delay by any party hereto in exercising any
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof, preclude any other or further exercise thereof or the
exercise of any other right.

     

    Section
10.3         Expenses.  Except
as otherwise set forth hereunder, all Expenses (as defined below) incurred in
connection with this Agreement or the transactions contemplated hereby shall be
paid by the party incurring such costs or expenses, whether or not the Closing
shall have occurred.  “Expenses”, as used in this Agreement, shall
include all out-of-pocket expenses (including, without limitation, all fees and
expenses of counsel, accountants, investment bankers, experts and consultants to
a party hereto and its Affiliates) incurred by a party or on its behalf in
connection with or related to the authorization, preparation, negotiation,
execution and performance of this Agreement and other ancillary
documents.  Each of the Sellers, the Company and the Purchaser shall
be responsible for its obligations to pay all stamp or other transfer taxes or
duties and capital gains, income, withholding or other Taxes arising from the
execution, delivery and performance of the transactions set forth in this
Agreement.  For the avoidance of doubt, the parties agree that the
Purchaser shall pay the full amounts of the First Payment, Second Payment (if
any) and the Third Payment (if any) without any withholding of any kind by the
Purchaser, unless such withholding is required by applicable Law or by the
interpretation or administration thereof, and the Sellers shall be responsible
for paying the capital gains tax and other transfer taxes for which the Sellers
are responsible, if any, incurred in connection therewith.  To the
extent that any amount is withheld by the Purchaser, such withheld amount shall
be treated for all purposes of this Agreement as having been paid to the
Sellers.

     

    Section
10.4         Assignment.  This
Agreement may not be assigned by a party hereto by operation of Law or otherwise
without the express written consent of the other parties hereto; provided,
however, that the Purchaser may assign any of its rights or interests, or
delegate its obligations hereunder, to any directly or indirectly wholly-owned
subsidiary of the Purchaser; provided, further, that no such assignment or
delegation shall relieve the Purchaser from any of its agreements and
obligations hereunder.  Any purported assignment or delegation not in
compliance with the provisions of this Agreement is void.

     

    
      
        
        

      

      
        - 51
-

        
          

        

      

      
        
        

      

    

     

    Section
10.5         Dispute
Resolution.

     

    (a)           Any
dispute, controversy or claim arising out of or in connection with this
Agreement, or the interpretation, breach, termination or validity hereof, shall
be submitted to the Hong Kong International Arbitration Centre (the “HKIAC”) for
settlement by arbitration with three arbitrators under the Arbitration Rules of
the United Nations Commission on International Trade Law in effect as of the
date of this Agreement (the “Arbitration Rules”),
as modified by this Agreement.  The Sellers, on one hand, and the
Purchaser, on the other hand, shall be entitled to designate one arbitrator,
provided, that
if any party fails to designate its arbitrator within twenty (20) calendar days
after the designation of the first of the three arbitrators, the HKIAC shall
have the authority to designate any person whose interests are neutral to the
parties as the second of the three arbitrators.  The two arbitrators
shall consult with each other to agree upon the selection of a third arbitrator,
provided, if
the two arbitrators cannot reach an agreement with respect to the third
arbitrator on or prior to the tenth (10th)
calendar day of initial consultation between the two arbitrators, the
appointment shall be made by the HKIAC pursuant to the Arbitration Rules and the
Procedures for Administration of International Arbitration of the HKIAC (the
“Arbitration
Procedures”). Any arbitration pursuant to this Section 10.5 shall be
administered by the HKIAC in accordance with the Arbitration Procedures in
effect as of the date of this Agreement.

     

    (b)           All
disputes, controversies or claims arising out of or in connection with this
Agreement, or the interpretation, breach, termination or validity hereof, shall
(in so far as is reasonably practicable) be resolved by means of a single
arbitral proceeding.  The arbitration proceedings shall be conducted
in English and Chinese.  The seat of the arbitration shall be in Hong
Kong.  Any award of the arbitral tribunal must be in writing and state
the grounds upon which it is based.

     

    (c)           The
decision of the arbitral tribunal shall be final and binding on the parties, and
the parties waive irrevocably any rights to any form of appeal, review or
recourse to any state or other judicial authority, in so far as such waiver may
validly be made.  Any such award shall be made in U.S. dollars.

     

    (d)           The
arbitral tribunal shall have no authority to award punitive damages or any other
damages not measured by the prevailing party’s actual damages, and may not, in
any event, make any ruling, finding or award that does not conform to the terms
and conditions of the relevant agreement(s).

     

    (e)           The
existence and content of any arbitration proceeding and any award in connection
therewith shall be subject to Section 5.9 (Confidentiality) hereof.

    


    (f)           Judgment
upon any arbitral award may be entered in any court of competent jurisdiction,
and any party may apply to such court for the recognition and enforcement of
such award as the Law of such jurisdiction may allow.  Each party
agrees that any judgment upon an arbitral award rendered against it under this
Agreement may be executed against its assets in any jurisdiction.

     

    (g)           Each
party agrees that service of process upon such party at the address so provided
in Section 10.1 shall be deemed in every respect effective service of process
upon such party in any such action, suit or proceeding.

     

    (h)           Each
party hereby agrees to submit any dispute, controversy or claim with respect to
the enforceability of the arbitration provisions of this Agreement to the HKIAC
for settlement by arbitration under the Arbitration Rules in accordance with the
Arbitration Procedures and the terms of this Agreement.  If the
arbitration provisions of this Agreement are held unenforceable by the HKIAC,
the parties shall be entitled to submit any dispute, controversy or claim
arising out of or in connection with this Agreement to any proper court of
competent jurisdiction for legal suits, actions or proceedings.

     

    
      
        
        

      

      
        - 52
-

        
          

        

      

      
        
        

      

    

     

    Section
10.6         GOVERNING
LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.

     

    Section
10.7         No Specific
Performance.  Each party hereto agrees and acknowledges that
(i) no party shall be entitled to an injunction or injunctions or other
equitable relief to prevent any breach or threatened breach of this Agreement or
to enforce specifically any of the terms and provisions hereof; (ii) each
party’s sole and exclusive remedies shall be the remedies available at law;
(iii) under no circumstance shall the Purchaser, on one hand, and the Sellers
and the Company collectively, on the other hand, be entitled to recover an
aggregate amount under such remedies that is in excess of US$80,000,000;and (iv)
in the event that any of the provisions of this Agreement are not performed by
any other party in accordance with their specific terms or are otherwise
breached, each party shall not allege, and hereby waives, any claim that such
remedies at law are inadequate; provided that prior to the termination of this
Agreement, each party shall be entitled to apply to an arbitral tribunal or
competent court for an interim injunction or injunctions to prevent any breach
or threatened breach of Section 5.9 (Confidentiality) or Section 5.16 (No
Solicitation).

     

    Section
10.8         Counterparts,
etc.  For the convenience of the parties hereto, this Agreement
may be executed in any number of separate counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts will
together constitute the same agreement.  Executed signature pages to
this Agreement may be delivered by facsimile or other electronic means and such
facsimiles or electronic means will be deemed as sufficient as if actual
signature pages had been delivered.

     

    Section
10.9         Entire Agreement;
Severability.

     

    (a)           This
Agreement constitutes the entire agreement among the parties hereto with respect
to the subject matter hereof and supersede all prior agreements and
understandings, both oral and written, between the parties hereto with respect
to the subject matter hereof.

     

    (b)           If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any Law or public policy, all other terms and provisions of
this Agreement shall nevertheless remain in full force and effect for so long as
the economic or legal substance of the transactions contemplated by this
Agreement is not affected in any manner materially adverse to any party
hereto.  Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties hereto as closely as possible in an acceptable manner in
order that the transactions contemplated by this Agreement are consummated as
originally contemplated to the greatest extent possible.

     

    Section
10.10       No Third Party
Beneficiaries.  This Agreement shall be binding upon and inure
solely to the benefit of the parties hereto and their respective successors and
permitted assigns and nothing herein, express or implied, is intended to or
shall confer upon any other Person other than the Sellers, the Company, the
Purchaser and their respective successors and permitted assigns, any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.

     

    [SIGNATURE PAGE FOLLOWS THIS
PAGE]

    


    
      
        
           


        

        
          - 53
-

          
            

          

        

        
           


        

      

    

    


    IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
date first above written.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      KONGZHONG
      CORPORATION

                                    
	 
      
	
                                      By:

                                    	
                                      /s/ Tai Fan

                                    
	 
      	
                                      Name:

                                    
	 
      	
                                      Title:

                                    
	 
	
                                      SHANGHAI
      DACHENG NETWORK TECHNOLOGY CO., LTD.

                                    
	 
      
	
                                      By: 

                                    	
                                      /s/ Zhen Yang (Seal)

                                    
	 
      	
                                      Name:

                                    
	 
      	
                                      Title:

                                    
	 
      	 
      
	
                                      ZHEN
      YANG

                                    
	 
      
	
                                      /s/ Zhen Yang

                                    
	 
      
	
                                      LEILEI
      WANG

                                    
	 
      
	
                                      /s/ Leilei Wang

                                    
	 
      
	
                                      XIAOLONG
      LI

                                    
	 
      
	
                                      /s/ Xiaolong
Li

                                    


                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          	
                                                                  TONG
      ZHANG

                                                                
	 
      
	
                                                                  /s/ Tong Zhang

                                                                
	 
      
	
                                                                  TIANSHU
      WU

                                                                
	 
      
	
                                                                  /s/ Tianshu
Wu