Document:

Exhibit 4.24

 

BUSINESS OPERATIONS AGREEMENT

 

This Business Operations Agreement (this “Agreement”) is entered in Beijing, the People’s Republic of China (the “PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for the purposes of this Agreement) and dated September 10, 2013.

 

by and among the following parties:

 

(1)                                 PARTY A: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

Legal Address: Section D, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: Victor Wing Cheung Koo

 

(2)                                 PARTY B: ZHEJIANG DONGYANG TIANSHI MEDIA LIMITED.

Legal Address: C3-015-A, Hengdian Television Industry Experimental Area, Zhejiang, China

Legal Representative: Lu Wen

 

(3)                                 PARTY C: LU WEN, a PRC citizen whose PRC identification number is 420111197001125521, and whose residential address is Room 801A, Building 505, Atlantic Place, Chaoyang District, Beijing, PRC

 

(4)                                 PARTY D: HU QIONG, a PRC citizen whose PRC identification number is 360103194206020328 and whose residential address Room 801A, Building 505, Atlantic Place, Chaoyang District, Beijing, PRC.

 

(5)                                 PARTY E: 1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD.

Legal Address: Section A&C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: QIN Qiong

 

(Individually a “Party”, and collectively the “Parties”)

 

WHEREAS:

 

A.                                    Party A is a wholly foreign-owned enterprise registered in the PRC;

 

B.                                    Party B is a wholly domestic-owned company registered in the PRC and is approved by relevant governmental authorities to engage in the advertising agency, production of television, and cultural information consultation;

 

C.                                    A business relationship has been established between Party A and Party B by entering into Exclusive Technical and Consulting Services Agreement,  pursuant to which Party B is required to make all the stipulated payments to Party A. Therefore, the daily operations of Party B will have a material impact on its ability to pay the payables to Party A;

 

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D.                                    Party C, Party D and Party E are the shareholders of Party B, who own 24% , 6%  and 70%, equity interest, respectively, in Party B.

 

E.                                     Party A, Party B, Party C and Party D entered into a Business Operation Agreement on April 23, 2013 (Original Agreement), pursuant to which the Parties reached consensus on the business operation of Party B. As the date hereof, the Parties agree to restate the Original Agreement. The Parties further acknowledge that this Agreement does not substantially change the Original Agreement, and the provisions of this Agreement reflect the intention of the parties when they executed the Original agreement.

 

THEREFORE, through friendly negotiation in the principle of equality and common interest, the Parties hereby jointly agree to abide by the following:

 

1.                                      Effective Date

 

This Agreement shall take effect from September 10, 2013 (“Effective Date”).

 

2.                                      Negative Undertakings

 

In order to ensure Party B’s performance of the agreements between Party A and Party B and all its obligations born to Party A, Party B together with its shareholders Party C ,Party D and Party E hereby jointly confirm and agree that unless Party B has obtained a prior written consent from Party A or another party appointed by Party A, Party B shall not conduct any transaction which may materially affect its assets, obligations, rights or operations, including but not limited to the following contents:

 

2.1                               To conduct any business which is beyond the normal business scope;

 

2.2                               To borrow money or incur any debt from any third party;

 

2.3                               To change or dismiss any directors or to dismiss and replace any senior management members;

 

2.4                               To sell to or acquire from any third party any assets or rights, including but not limited to any intellectual property rights;

 

2.5                               To provide guarantee for any third party with its assets or intellectual property rights or to provide any other guarantee or to place any other obligations over its assets;

 

2.6                               To amend the articles of association of the Party B or to change its business area;

 

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2.7                               To change the normal business process or modify any material company policy;

 

2.8                               To assign any of the rights or obligations under this Agreement herein to any third party;

 

2.9                               To incur or assume any indebtedness.

 

2.10                        To liquidate Party B and allocate the remaining assets;

 

2.11                        To make significant adjustment to its business operation mode, marketing strategy, operation policy or client relationship.

 

3.                                      Management of Operation and Arrangements of Human Resource

 

3.1                               Party B together with its shareholders Party C , Party D and Party E hereby jointly agree to accept and strictly perform the proposals in respect of the employment and dismissal of its employees, the daily business management and financial management, etc., provided by Party A from time to time.

 

3.2                               Party B together with its shareholders Party C, Party D and Party E hereby jointly and severally agree that Party C, Party D and Party E shall only appoint the personnel designated by Party A as the Executive Director or Directors of the Board of Directors of Party B in accordance with the procedures required by the applicable laws and regulations and the articles of association of Party B, and shall cause such Executive Director or Board of Directors of Party B to appoint the personnel designated by Party A as Party B’s General Manager, Chief Financial Officer, and other senior officers.

 

3.3                               If any of the above officers resigns or is dismissed by Party A, he or she will lose the qualification to be appointed for any position in Party B and thereafter Party B, Party C ,Party D and Party E shall appoint or cause the appointment of another candidate designated by Party A to assume such position.

 

3.4                               For the purpose of the above-mentioned Section 3.3, Party B, Party C, ,Party D and Party E shall take all the necessary internal or external procedures to accomplish the above dismissal and engagement in accordance with the relevant laws and regulations, the articles of association of Party B and this Agreement.

 

3.5                               Each of Party C, Party D and Party E hereby agrees to, upon the execution of this Agreement, simultaneously sign a Power of Attorney, pursuant to which each of Party C ,Party D and Party E shall authorize  any individual designated by Party A in writing, to the extent permitted by the PRC law, to exercise his or her shareholders’ rights, including the full voting right of a shareholder at Party B’s shareholders’ meetings. Each of Party C, Party D and Party E further agrees to replace the authorized person appointed according to the above mentioned Power of Attorney at any time according to the requirement of Party A.

 

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4.                                      Other Agreements

 

4.1                               Given (i) that the business relationship between Party A and Party B has been established through the Exclusive Technical and Consulting Services Agreement and (ii) that the daily business activities of Party B will have a material impact on Party B’s ability to pay the payables to Party A, each of Party C, Party D and Party E agrees that:

 

·                                          he/she/it shall not put forward, or vote in favor of, any shareholder resolution to, or otherwise request Party B to, distribute profits, funds, assets or property to the shareholders of Party B or any of its affiliates; and

 

·                                          he/she/it shall not put forward, or vote in favor of, any shareholder resolution to, or otherwise request Party B to, issue any dividends or other distributions with respect to the equity interest of Party B held by Party C, Party D and Party E; provided, however, if such dividends or other distributions are distributed to Party C and/or Party D and/or Party E from Party B,  he/she will immediately and unconditionally pay or transfer to Party A any dividends or other distributions in whatsoever form obtained from Party B as a shareholder of Party B at the time such payables arise, after having deducted and paid any and all relevant taxes and expenses applicable to such a shareholder as a result of his/her receipt of such dividends or other distributions.

 

4.2                               If any of Party C, Party D or Party E is held liable for any legal or any other responsibilities by reason of his/her performance of his/her obligations under this Agreement and as a shareholder of Party B, Party A shall keep each of Party C, Party D and Party E fully indemnified from any such liabilities, costs or losses (including but not limited to any and all legal expenses) incurred by Party C and/or Party D and/or Party E, provided that the actions perform by Party C, Party D and Party E according to his/her obligations under this Agreement and as a shareholder of Party B are taken in good faith and are not contrary to the best interests of Party A and Party B.

 

4.3                               To ensure that the cash flow requirements of Party B’s ordinary  operations are met and/or to set off any loss accrued during such operations, Party A is obligated, only to the extent permissible under PRC law, to provide financing support for Party B, whether or not Party B actually incurs any such operational loss. Party A’s financing support for Party B may take the form of bank entrusted loans or borrowings. Contracts for any such entrusted loans or borrowings shall be executed separately.

 

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5.                                      Entire Agreement and Modifications

 

5.1                               This Agreement together with all the other agreements and/or documents mentioned or specifically included in this Agreement, to which Party A, Party B, Party C and/or Party D and/or Party E is a party thereunder (where applicable) will be part of the whole agreements concluded in respect of the subject matters in this Agreement and shall replace all the other prior oral and written agreements, contracts, understandings and communications among all the parties involving the subject matters of this Agreement.

 

5.2                               Any modification of this Agreement shall take effect only after it is executed by each and every Party. The amendment and supplement duly executed by each and every Party shall form part of this Agreement and shall have the same legal effect as this Agreement.

 

6.                                      Governing Law

 

The execution, validity, performance, interpretation and disputes of this Agreement shall be governed by and construed in accordance with the PRC laws.

 

7.                                      Dispute Resolution

 

7.1                               The Parties shall strive to settle any dispute arising from the interpretation or performance of this Agreement through friendly consultation in good faith. In case no settlement can be reached through friendly consultation, each Party can submit such matter to the China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration in accordance with the then current rules of CIETAC. The arbitration proceedings shall take place in Beijing and shall be conducted in Chinese. The arbitration award shall be final and binding upon all the Parties. This article shall not be affected by the termination or elimination of this Agreement.

 

7.2                               During the process of the dispute resolution, each Party shall continue to perform its obligations in good faith according to the provisions of this Agreement except for the subject matters in dispute.

 

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8.                                     Notice

 

8.1                               Any notice that is given by the Parties hereto for the purpose of performing the rights and obligations hereunder shall be in written form. Where such notice is delivered personally, the actual delivery time is regarded as notice time; where such notice is transmitted by telex or facsimile, the notice time is the time when such notice is transmitted. If such notice (i) does not reach the addressee on a business day or (ii) reaches the addressee after the business hours, the next business day following such day is the date of notice. The written form includes facsimile and telex.

 

8.2                               Any notice or other correspondence hereunder provided shall be delivered to the following addresses in accordance with the above terms:

 

	
PARTY   A
    	
 
    	
:
    	
 
    	
1VERGE   INTERNET TECHNOLOGY (BEIJING) CO., LTD.
    
	
Address 
    	
 
    	
:
    	
 
    	
Section D,   5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China
    
	
Fax
    	
 
    	
:
    	
 
    	
010-59708818
    
	
Tele
    	
 
    	
:
    	
 
    	
010-58851881
    
	
Addressee
    	
 
    	
:
    	
 
    	
Victor Wing   Cheung Koo
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
PARTY   B
    	
 
    	
:
    	
 
    	
ZHEJIANG   DONGYANG TIANSHI MEDIA LIMITED.
    
	
Address 
    	
 
    	
:
    	
 
    	
C3-015-A,   Hengdian Television Industry Experimental Area, Zhejiang, China
    
	
Fax
    	
 
    	
:
    	
 
    	
010-84862809
    
	
Tele
    	
 
    	
:
    	
 
    	
010-84864655
    
	
Addressee
    	
 
    	
:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
PARTY   C
    	
 
    	
:
    	
 
    	
LU   WEN
    
	
Address 
    	
 
    	
:
    	
 
    	
Room1803,   Building 525, Atlantic Place, Chaoyang District, Beijing, PRC
    
	
Fax
    	
 
    	
:
    	
 
    	
010-84862809
    
	
Tele
    	
 
    	
:
    	
 
    	
010-84864655
    
	
Addressee
    	
 
    	
:
    	
 
    	
LU Wen
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
PARTY   D
    	
 
    	
:
    	
 
    	
HU   QIONG
    
	
Address 
    	
 
    	
:
    	
 
    	
Room 801A,   Building 505, Atlantic Place, Chaoyang District, Beijing, PRC.
    
	
Fax
    	
 
    	
:
    	
 
    	
010-84862809
    
	
Tele
    	
 
    	
:
    	
 
    	
010-84864655
    
	
Addressee
    	
 
    	
:
    	
 
    	
HU Qiong
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
PARTY E
    	
 
    	
:
    	
 
    	
1VERGE   INFORMATION TECHNOLOGY (BEIJING) CO., LTD.
    
	
Address 
    	
 
    	
:
    	
 
    	
Section A&C,   5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China
    
	
Fax
    	
 
    	
:
    	
 
    	
010-59708818
    
	
Tele
    	
 
    	
:
    	
 
    	
010-58851881
    
	
Addressee
    	
 
    	
:
    	
 
    	
QIN Qiong
    

 

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9.                                      Effectiveness, Term and Others

 

9.1                               This Agreement shall be executed by a duly authorized representative of each Party on the date first written above and become effective as of the Effective Date. The term of this agreement is ten years unless early termination occurs in accordance with the relevant provisions herein. This Agreement may extend automatically for another ten year period except that Party A provides a written notice stating its intention not to extend this Agreement three months prior to the expiration of the initial term of this Agreement.

 

9.2                               Party B, Party C, Party D, Party E shall not terminate this Agreement within the terms of this Agreement. Notwithstanding the above stipulation, Party A shall have the right to terminate this Agreement at any time by issuing a prior written notice to Party B, Party C, Party D and Party E thirty (30) days before the termination.

 

9.3                               In case any terms and stipulations in this Agreement are regarded as illegal or can not be performed in accordance with the applicable laws, they shall be deemed to be deleted from this Agreement and lose their effect and this Agreement shall be treated as if they did not exist from the very beginning. However, the remaining stipulations will remain effective. Each Party shall replace the deleted stipulations with lawful and effective stipulations, which are acceptable to each Party, through mutual negotiation.

 

9.4                               Any failure or delay on the part of any Party to exercise any rights, powers or privileges hereunder shall not operate as a waiver thereof. Any single or partial exercise of such rights, powers or privileges shall not preclude any further exercise of such rights, powers or privileges.

 

10.                               Languages and Counterparts

 

This Agreement is executed in Five (5) originals in English and each Party shall retain 1 original.

 

[The space below is intentionally left blank.]

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first written above.

 

	
PARTY A: 1VERGE INTERNET TECHNOLOGY (BEIJING)   CO., LTD.
    
	
(Company Seal)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By: 
    	
/s/ Victor Wing   Cheung Koo
    	
 
    
	
Authorized   Representative: Victor Wing Cheung Koo
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
PARTY B: ZHEJIANG DONGYANG TIANSHI MEDIA   LIMITED.
    
	
(Company Seal)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By: 
    	
/s/Authorized   Representative
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
PARTY   C: LU WEN
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By: 
    	
/s/ LU Wen
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
PARTY   D: HU QIONG
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By: 
    	
/s/ HU Qiong
    	
 
    
	
 
    	
 
    
	
PARTY E: 1VERGE INFORMATION TECHNOLOGY   (BEIJING) CO., LTD.
    
	
 
    	
 
    
	
 
    	
 
    
	
By: 
    	
/s/ Dele Liu
    	
 
    
	
Authorized   Representative: Dele Liu
    	
 
    
	
(Company Seal)
    	
 
    

 

8Exhibit 4.25

 

EQUITY INTEREST PLEDGE AGREEMENT

 

This Equity Interest Pledge Agreement (this “Agreement”) is entered in Beijing, the People’s Republic of China (“PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for the purposes of this Agreement) by and among the following parties:

 

(1)                                 PLEDGEE: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

Legal Address: Section A and C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

Legal Representative: Victor Wing Cheung Koo

 

and

 

(2)                                 PLEDGORS:

 

LU WEN, a PRC citizen whose PRC identification number is 420111197001125521and whose residential address is, Room 1803, Building 525, Atlantic Place, Chaoyang District, Beijing, PRC.

 

HU QIONG, a PRC citizen whose PRC identification number is 360103194206020328and whose residential address is, Room 1803, Building 525, Atlantic Place, Chaoyang District, Beijing, PRC.

 

1VERGE INFORMATION TECHNOLOGY (BEIJING) CO., LTD., (“1Verge Information”) a limited liability company established under the laws of the PRC, with its registered address at Section A&C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing, China

 

(individually a “Party” and collectively the “Parties”)

 

WHEREAS:

 

A.                                    LU Wen, HU Qiong and 1Verge Information respectively own an 24%, 6% and 70%, equity interest in Zhejiang Dongyang Tianshi Media Limited.. (“Dongyang Tianshi”).

 

B.                                    Dongyang Tianshi is a limited liability company engaging in the advertising agency, production of television, and cultural information consultation.

 

C.                                    The Pledgee, a wholly foreign-owned company registered in Beijing, PRC, has been licensed by the PRC relevant government authority to carry on the business of computer software products and Internet products development, sale and services, etc.

 

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D.                                    In order to ensure that (i) the Pledgee collects Service Fees under the Services Agreement from Dongyang Tianshi, (iii) the Pledgors’ other obligations under the Option Agreement are fulfilled, and (iv) all other debts, monetary liabilities or other payment obligations owed to the Pledgee by the Pledgors and/or Dongyang Tianshi, arising under or in relation to the Services Agreement, including, but not limited to, any obligation to pay damages for a breach of any obligation of the Pledgors or Dongyang Tianshi under the Services Agreement (as applicable), are paid, the Pledgors are willing to pledge all the Equity Interest (as defined below) in Dongyang Tianshi to the Pledgee as security for the above-mentioned obligations of the Pledgors and Dongyang Tianshi (collectively, the “Secured Obligations”).

 

In order to set forth each Party’s rights and obligations, the Pledgee and the Pledgors through mutual negotiations hereby enter into this Agreement based upon the following terms:

 

1.                                      Definitions

 

Unless otherwise provided in this Agreement, the following terms shall have the following meanings:

 

1.1                               “Pledge” means the full content of Section 2 hereunder.

 

1.2                               “Equity Interest” means all the equity interests in Dongyang Tianshi held by the relevant Pledgor (including all present and future rights and benefits based on such equity interests), and any additional equity interests in Dongyang Tianshi acquired by such Pledgor subsequent to the date hereof. For the avoidance of any doubt, LU Wen holds a 24% equity interest (amounting to RMB2,400,000), HU Qiong holds a 6% equity interest (amounting to RMB 600,000) in Dongyang Tianshi and1Verge Information holds a 70% equity interest (amounting RMB 7,000,000 ).

 

1.3                               “Event of Default” means any event in accordance with Section 6 hereunder.

 

1.4                               “Notice of Default” means the notice of default issued by the Pledgee in accordance with this Agreement.

 

1.A.                          “Effective Date”

 

This Agreement shall be effective on September 10, 2013 (“Effective Date”). Notwithstanding the foregoing, the Pledge (as defined in Section 2.1) shall only come into effect in accordance with Section 3 of this Agreement.

 

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2.                                      Pledge

 

2.1                               Each Pledgor hereby pledges, and if required, transfers and assigns all his/her rights, titles and interests in the Equity Interest in Dongyang Tianshi to the Pledgee as security for all of the Secured Obligations (the “Pledge”) of an amount up to the Maximum Amount (as defined below), and grant a first priority security interest in all rights, titles and interests that he/she has or may at any time hereafter acquire in and to the Equity Interest, together with all equity or other ownership interests representing a dividend on the Equity Interest, a distribution or return of capital upon or in respect of such Equity Interest, any subscription, first refusal, pre-emptive or other purchase rights with respect to or arising from such Equity Interest, any voting rights with respect to such Equity Interest or any other interest which, by reason of notice or lapse of time or the occurrence of other events, may be converted into a direct equity interest in Dongyang Tianshi, and all proceeds of the foregoing (collectively, the “Pledged Collateral”).

 

2.1.1                     The Parties understand and agree that the monetary valuation arising from, relating to or in connection with the Secured Obligations shall be a variable and floating valuation until the Settlement Date (as defined below). Therefore, based on the reasonable assessment and evaluation by the Pledgors and the Pledgee of the Secured Obligations and the Pledged Collateral, the Pledgors and the Pledgee mutually acknowledge and agree that the Pledge shall aggregately secure the Secured Obligations for a maximum amount of RMB 10,000,000 (the “Maximum Amount”) prior to the Settlement Date.

 

The Pledgors and the Pledgee may, taking into account the fluctuation in the monetary value of the Secured Obligations and the Pledged Collateral, adjust the Maximum Amount based on mutual agreement by amending and supplementing this Agreement, from time to time, prior to the Settlement Date.

 

2.1.2                     Upon the occurrence of any of the events below (each an “Event of Settlement”), the Secured Obligations shall be fixed at a value of the sum of all Secured Obligations that are due, outstanding and payable to the Pledgee on or immediately prior to the date of such occurrence (the “Fixed Obligations”):

 

(a)                                 any or all of the Services Agreements or the Option Agreements expires or is terminated pursuant to the stipulations thereunder;

 

(b)                                 the occurrence of an Event of Default pursuant to Section 6 that is not resolved, which results in the Pledgee serving a Notice of Default to the relevant Pledgor(s) pursuant to Section 6.3;

 

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(c)                                  the Pledgee reasonably determines (having made due enquiries) that any of the Pledgors and/or Dongyang Tianshi is insolvent or could potentially be made insolvent; or

 

(d)                                 any other event that requires the settlement of the Secured Obligations in accordance with relevant laws of the PRC.

 

2.2                               For the avoidance of doubt, the day of the occurrence of an Event of Settlement shall be the settlement date (the “Settlement Date”). On or after the Settlement Date, the Pledgee shall be entitled, at the election of the Pledgee, to enforce the Pledge in accordance with Section 7.

 

2.3                               The Pledgee is entitled to collect dividends or other distributions, if any, arising from the Equity Interest during the Term of the Pledge (as defined below).

 

3.                                      Effectiveness of Pledge, Scope and Term

 

3.1                               The Pledgors shall, promptly after the duly registration of the equity ownership of Dongyang Tianshi described hereof and the execution of this Agreement, register this Agreement and the Pledge hereunder with the State Administration for Industry and Commerce of the PRC or its competent local counterpart (the “AIC”). The Pledgors shall deliver to the Pledgee a copy of the registration or filing certificate from the AIC within 7 days from the date of submission of the application for registration of this Agreement and Pledge with the AIC.

 

3.2                               The Pledge shall be effective upon the registration of the Pledge with the AIC in accordance with Section 3.1 above. The term of the Pledge shall commence on the date when the Pledge is registered with the AIC and shall expire on the earlier of (a) the date on which all outstanding Secured Obligations are paid in full or otherwise satisfied (as applicable) or (b) the Pledgee enforces the Pledge pursuant to the terms and conditions hereof, to satisfy its rights under the Secured Obligations and Pledged Collateral in full (the “Term of the Pledge”).

 

4.                                      Representations and Warranties of the Pledgors

 

Each of the Pledgors hereby makes the following representations and warranties to the Pledgee and confirms that the Pledgee executes this Agreement in reliance on such representations and warranties:

 

4.1                               Each of the Pledgors is the legal owner of the Equity Interest that has been registered in his/her name, and is entitled to create a pledge on  such Equity Interest.

 

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4.2                               None of the Pledged Collateral or the Pledge will be interfered with by any other parties at any time once the Pledgee exercises the rights of the Pledge in accordance with this Agreement.

 

4.3                               The Pledgee shall be entitled to dispose or assign the Pledge in accordance with the relevant laws and this Agreement.

 

4.4                               All necessary authorizations have been obtained for the execution and performance of this Agreement by each of the Pledgors and the execution and performance of this Agreement by each of the Pledgors does not violate any applicable laws or regulations. The representative of each of the Pledgors who signs this Agreement is lawfully and effectively authorized.

 

4.5                               Each of the Pledgors warrants that there is no on-going civil, administrative or criminal litigation or administrative punishment or arbitration related to the Equity Interest and is not aware of any such action pending or likely to be pending in the future as of the date of this Agreement.

 

4.6                               There are no outstanding taxes, fees or undecided legal procedures related to the Equity Interest as of the date of this Agreement.

 

4.7                               Each stipulation hereunder is the expression of each Party’s true intention and shall be binding upon all the Parties.

 

5.                                      Covenants of the Pledgors

 

5.1                               Each of the Pledgors covenants to the Pledgee that he/she shall:

 

5.1.1                     not transfer or assign the Equity Interest, or create or permit to be created any pledge, lien, charge, mortgage, encumbrance, option, security or other interest in or over the Equity Interest that has been registered in his/her name, other than the Pledge created hereunder and the option granted under the Option Agreement, without the prior written consent from the Pledgee;

 

5.1.2                     comply with and implement laws and regulations with respect to the pledge of rights, present to the Pledgee the notices, orders or suggestions with respect to the Pledge issued or made by the competent authority within 5 days upon receiving such notices, orders or suggestions and take actions in accordance with the reasonable instructions of the Pledgee; and

 

5.1.3                     timely notify the Pledgee of any events or any received notices  (i) which may affect the Equity Interest or any part of the Pledgee’s rights, (ii) which may change the Pledgors’ covenants or obligations under this Agreement or (iii) which may affect the Pledgors’ performance of their obligations under this Agreement, and take actions in accordance with the reasonable instructions of the Pledgee.

 

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5.2                               The Pledgors agree that the Pledgee’s right of exercising the Pledge under this Agreement shall not be suspended or hampered by the Pledgors or any successors of the Pledgors or any person authorized by the Pledgors.

 

5.3                               The Pledgors jointly and severally covenant to the Pledgee that in order to protect or perfect the security over the Secured Obligations, the Pledgors shall (i) execute in good faith and cause other parties who have interests in the Pledge to execute all the forms, instruments, agreements (including those required for the registration and de-registration of the Pledge with the AIC), and/or (ii) take actions and cause other parties who have interests in the Pledge to take actions as required by the Pledgee and (iii) allow the Pledgee to exercise the rights and authorization vested in the Pledgee under this Agreement.

 

5.4                               The Pledgors agree to promptly make or cause to be made any filings or records, give or cause to be given any notices and take or cause to be taken any other actions as may be necessary under the laws of the PRC, to perfect the Pledge of the Pledged Collateral, including the AIC registration set forth in Section 3.1.

 

5.5                               Each of the Pledgors covenants to the Pledgee that he/she will comply with and perform all the guarantees, covenants, agreements, representations and conditions for the benefits of the Pledgee. The Pledgor shall compensate for all the losses suffered by the Pledgee for such Pledgor’s failure to perform or fully perform his/her guarantees, covenants, agreements, representations or conditions.

 

6.                                      Events of Default

 

6.1                               Each of the following shall constitute an Event of Default:

 

6.1.1                 Any of the Pledgors and/or Dongyang Tianshi fails to make full and timely payment of any amounts due under the Secured Obligations as required under the Services Agreement or an event of default (as defined and stipulated in those agreements) has occurred and is continuing;

 

6.1.2                     any of the Pledgors makes or has made any inaccurate, incomplete, misleading or untrue representations or warranties  under Section 4, or is in violation or breach of any of the representations and warranties under Section 4;

 

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6.1.3                     any of the Pledgors breaches any of the covenants under Section 5;

 

6.1.4                     any of the Pledgors breaches any other covenants, undertakings or obligations of the Pledgors set forth herein;

 

6.1.5                     any of the Pledgors is unable to perform its obligations under this Agreement due to the separation or merger of Dongyang Tianshi with other third parties or for any other reason;

 

6.1.6                     any of the Pledgors relinquishes all or any part of the Pledged Collateral or transfers or assigns all or any part of the Pledged Collateral without the prior written consent of the Pledgee (except the transfers or assigns permitted under the Option Agreement);

 

6.1.7                     any indebtedness, guarantee or other obligation of any of the Pledgors and/or Dongyang Tianshi, whether pursuant to a contract or otherwise, (i) is accelerated as a result of a default thereunder and is required to be repaid or performed prior to the due date; or (ii) has become due and is not repaid or performed when due which, in the Pledgee’s reasonable view, has materially adversely affected the Pledgor’s ability to perform their obligations under this Agreement;

 

6.1.8                     this Agreement is illegal as a result of any applicable laws or any of the Pledgors is restricted from continuing to perform his/her obligations under this Agreement;

 

6.1.9                     any approval, permit, license or authorization from any applicable governmental entity (or registration or filing procedure) required for Dongyang Tianshi to engage in the advertising agency and publishing businesses in the PRC is withdrawn, suspended, invalidated or materially amended;

 

6.1.10              any approval, permit, license or authorization from any applicable government authority required to perform this Agreement or make this Agreement enforceable, legal and valid is withdrawn, suspended, invalidated or materially amended; or

 

6.1.11              any property owned by the Pledgor is altered or damaged which, in the Pledgee’s reasonable view, has materially adversely affected the Pledgor’s ability to perform their obligations under this Agreement.

 

7

 

6.2                               The Pledgors shall immediately give a written notice to the Pledgee if any of the Pledgors is aware or find that any event set forth in Section 6.1 or any events that may result in the foregoing events have occurred or are occurring.

 

6.3                               Unless an Event of Default set forth in Section 6.1 has been rectified to the Pledgee’s satisfaction, the Pledgee, at any time the event of default occurs or thereafter, may give a written notice of default to any or both Pledgors, and require such Pledgor(s) and/or Dongyang Tianshi, at the discretion of the Pledgee, to immediately make full payment of the outstanding amounts payable under the Services Agreements, and/or Option Agreements (as the case may be), and other payables, or dispose of the Pledge in accordance with Section 7 herein.

 

7.                                      Exercise of the Rights of the Pledge

 

7.1                               The Pledgors shall not transfer or assign the Pledge without prior written approval from the Pledgee prior to the full settlement and fulfillment of the Secured Obligations.

 

7.2                               The Pledgee shall give a notice of default to the Pledgor(s) when the Pledgee exercises the rights of Pledge.

 

7.3                               Subject to Section 6.3, the Pledgee may exercise the right to dispose of the Pledge at any time when the Pledgee gives a notice of default in accordance with Section 6.3 or thereafter.

 

7.4                               The Pledgee is entitled to have priority in receiving proceeds from the auction or sale of all or part of the Pledged Collateral in accordance with legal procedures until the outstanding Secured Obligation or other monetary obligations payable by the Pledgors and/or Dongyang Tianshi is fully paid, repaid or otherwise settled.

 

7.5                               The Pledgors shall not hinder the Pledgee from disposing the Pledge in accordance with this Agreement and shall give necessary assistance so that the Pledgee could realize his Pledge.

 

8.                                      Transfer or Assignment

 

8.1                               The Pledgors shall not donate or transfer their rights and obligations herein to any third party without prior written consent from the Pledgee.

 

8.2                               This Agreement shall be binding upon the Pledgors and their successors and be effective to the Pledgee and his each successor and assignee.

 

8.3                               The Pledgee may transfer or assign all Secured Obligations and its right to the Pledge to any third party at any time. In this case, the  assignee shall enjoy and undertake the same rights and obligations herein of the Pledgee as if the assignee is a party hereto. When the Pledgee transfers or assigns the Secured Obligations and its rights to the Pledge, at the request of the Pledgee, the Pledgors shall execute the relevant agreements and/or documents with respect to such transfer or assignment.

 

8

 

8.4                               After a change to the Pledgee resulting from a transfer or assignment, the new parties to the pledge shall re-execute a pledge contract.

 

9.                                      Termination

 

This Agreement shall not terminate until the Term of the Pledge expires pursuant to Section 3 herein.

 

10.                               Force Majeure

 

10.1                        If this Agreement is delayed in or prevented from performing in the Event of Force Majeure (“Event of Force Majeure”), only within the limitation of such delay or prevention, the affected Party is absolved from any liability under this Agreement. Force Majeure, which includes acts of governments, acts of nature, fire, explosion, geographic change, flood, earthquake, tide, lightning, war, means any unforeseen events beyond the prevented Party’s reasonable control and cannot be prevented with reasonable care. However, any shortage of credit, capital or finance shall not be regarded as an event beyond a Party’s reasonable control. The Party affected by Force Majeure who claims for exemption from performing any obligations under this Agreement or under any Section herein shall notify the other party of such exemption promptly and advice him of the steps to be taken for completion of the performance.

 

10.2                        The Party affected by Force Majeure shall not assume any liability under this Agreement. However, subject to the Party affected by Force Majeure having taken its reasonable and practicable efforts to perform this Agreement, the Party claiming for exemption of the liabilities may only be exempted from performing such liability as within limitation of the part performance delayed or prevented by Force Majeure. Once causes for such exemption of liabilities are rectified and remedied, both parties agree to resume performance of this Agreement with their best efforts.

 

11.                               Applicable Law and Dispute Resolution

 

11.1                        The execution, validity, performance and interpretation of this Agreement shall be governed by and construed in accordance with the laws of the PRC.

 

9

 

11.2                        The Parties shall strive to settle any dispute arising from the interpretation or performance through friendly consultation. In case no settlement can be reached through consultation, each party can submit such matter to China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration. The arbitration shall follow the then current rules of CIETAC, and the arbitration proceedings shall be conducted in Chinese and shall take place in Beijing. The arbitration award shall be final and binding upon the Parties. This article shall not be affected by the termination or elimination of this Agreement.

 

11.3                        In case of any disputes arising out of the interpretation and performance of this Agreement or any pending arbitration of such dispute, each Party shall continue to perform their obligations under this Agreement, except for the matters in dispute.

 

12.                               Notice

 

Any notice or correspondence, which is given by the Party as stipulated hereunder, shall be in Chinese and English writing and shall be delivered in person or by registered or prepaid mail or recognized express service, or be transmitted by telex or facsimile to the following addresses:

 

	
PLEDGEE
    	
:
    	
1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.
    
	
Address
    	
:
    	
Section A   and C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian District, Beijing,   China
    
	
Fax
    	
:
    	
010-59708818
    
	
Tele
    	
:
    	
010-58851881
    
	
Addressee
    	
:
    	
Victor Wing   Cheung Koo
    

 

	
LU WEN
    	
 
    	
 
    
	
Address
    	
:
    	
Room 1803,   Building 525, Atlantic Place, Chaoyang District, Beijing, PRC
    
	
Fax
    	
:
    	
010-84862809
    
	
Tele
    	
:
    	
010-84864655
    
	
Addressee
    	
:
    	
LU Wen
    

 

	
HU QIONG
    	
 
    	
 
    
	
Address
    	
:
    	
Room 1803,   Building 525, Atlantic Place, Chaoyang District, Beijing, PRC
    
	
Fax
    	
:
    	
010-84862809
    
	
Tele
    	
:
    	
010-84864655
    
	
Addressee
    	
:
    	
 HU Qiong
    

 

	
1Verge Information Technology (Beijing) Co., Ltd.
    	
 
    
	
Address:   Section A&C, 5/F, SinoSteel Plaza, No 8, Haidian Street, Haidian   District, Beijing, China
    	
 
    
	
Fax:
    	
010-59708818
    
	
Tele:
    	
010-58851881
    
	
Addressee
    	
:
    	
QIN Qiong
    
					

 

10

 

13.                               Appendices

 

The appendices to this Agreement constitute an integral part of this Agreement.

 

14.                               Waiver

 

The Pledgee’s non-exercise or delay in exercise of any rights, remedies, power or privileges hereunder shall not be deemed as the waiver of such rights, remedies, power or privileges. Any single or partial exercise of the rights, remedies, power and privileges shall not exclude the Pledgee from exercising any other rights, remedies, power and privileges. The rights, remedies, power and privileges hereunder are accumulative and shall not exclude the application of any other rights, remedies, power and privileges stipulated by laws.

 

15.                               Miscellaneous

 

15.1                        Any amendments, modifications or supplements to this Agreement shall be in writing and come into effect upon being executed and sealed by the Parties hereto.

 

15.2                        In case any terms and stipulations in this Agreement are regarded as illegal or can not be performed in accordance with the applicable law, such terms and stipulations shall be deemed to ineffective and not enforceable within the scope governed by the applicable law, and the remaining stipulations will remain effective.

 

[The space below is intentionally left blank.]

 

11

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first written above.

 

PLEDGEE: 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD.

(Company Seal)

 

 

	
By:
    	
/s/ Victor Wing   Cheung Koo
    	
 
    
	
Authorized Representative: Victor Wing Cheung Koo
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
PLEDGOR: LU WEN
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ LU Wen
    	
 
    
	
Name:
    	
LU WEN
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
PLEDGOR: HU QIONG
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ HU Qiong
    	
 
    
	
Name:
    	
HU QIONG
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
PLEDGOR: 1VERGE INFORMATION TECHNOLOGY   (BEIJING) CO., LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Dele Liu
    	
 
    
	
Authorized Representative: Dele Liu
    	
 
    
	
(Company Seal)
    	
 
    

 

12

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