Document:

Shareholders and Sponsors Agreement

 Exhibit 10.39 
 Execution Copy 
 SHAREHOLDERS AND SPONSORS AGREEMENT 
 THIS SHAREHOLDERS AND SPONSORS AGREEMENT (this “Agreement”) is made as of the 15th day of October 2007, by and among Pypo Digital
Company Limited, an exempted company incorporated and existing under the Laws of the Cayman Islands (the “Company”), Pypo Holdings (HK) Company Limited (“PDH(HK)”), a company incorporated under the Laws of the Hong
Kong Special Administrative Region of the People’s Republic of China (“Hong Kong”), Beijing Pypo Technology Group Company Limited 

 (“Beijing Pypo”), a limited company incorporated and existing under the Laws of the People’s Republic of China, ARCH Digital Holdings Ltd. (the “Investor”), an exempted company
incorporated and existing under the Laws of the British Virgin Islands, China Bright Group Co., Ltd. 

 (“China Bright”), a company incorporated under the Laws of Hong Kong, Style Technology Development Limited 

 (“Style Tech”), a company incorporated under the Laws of Hong Kong, Mr. ZHANG Kuo 

 a citizen of the People’s Republic of China (“Zhang”), Mr. FEI Dongping 

 a citizen of the People’s Republic of China (“Fei”), and Mr. WAN Francis 

 a citizen of Canada (“Wan”, together with Zhang and Fei, the “Sponsors”). 
 The foregoing parties shall be hereinafter referred to collectively as the “Parties” and individually as a “Party”. 
 RECITALS 
 WHEREAS, the Company, Beijing Pypo, the Investor, China Bright, Style Tech, and the
Sponsors have entered into an Equity Subscription Agreement dated as of October 15th, 2007 (the “Equity Subscription Agreement”), pursuant to which the Investor will make a capital contribution to the Company of US$90,000,000
at the Closing (as defined below) in exchange for 33% enlarged equity interests in the Company (the “Investment”); 
 WHEREAS, each of China Bright and Style Tech currently owns 50% equity interests in the Company; 
 WHEREAS, the Company owns
beneficially and of record all the equity securities of PDH(HK); 
 WHEREAS, it is contemplated that immediately prior to and after the
Closing, PDH(HK) will own all the registered capital of Beijing Pypo; and 
 WHEREAS, it is a condition precedent to the Closing of the
Investment under the Equity Subscription Agreement that the Parties enter into this Agreement to set out the terms governing the relationship among the Investor, China Bright and Style Tech as shareholders of the Company (and in the case of the
Sponsors, as additional indemnifying parties and warrantors) and their agreement in relation to the management and operation of the Company, PDH(HK) and Beijing Pypo; 

 WITNESSETH 
 NOW, THEREFORE, in consideration of the premises set forth above, the mutual promises and covenants set forth herein and other good and valuable consideration, the Parties hereto hereby agree as follows: 

SECTION 1. INTERPRETATION. 
 1.1 Definitions. The following
terms (whenever used in capitalized initials) are not defined in the text of the Agreement and shall have the meanings ascribed to them below: 
 “2007/2008 Fiscal Year” means the period beginning from April 1, 2007 and ending on March 31, 2008. 
 “2008/2009 Fiscal Year” means the period beginning from April 1, 2008 and ending on March 31, 2009. 

“2007/2008 Fiscal Year Earnings Target” means RMB 216 million. 
 “2008/2009 Fiscal Year Earnings Target” means RMB 250 million. 
 “Affiliated Entities” shall have the meaning ascribed thereto in Section 3.2 of the Equity Subscription
Agreement. 
 “Beijing Pypo Group” shall have the meaning ascribed thereto in Section 1 of the
Equity Subscription Agreement. 
 “Beijing Pypo Operations” means the business of Beijing Pypo Group,
excluding the businesses of any companies which have been or may be acquired by Beijing Pypo or its Related Parties following the Closing of the Investment. 
 “Business Day” means any weekday that the banks in Hong Kong are open for business. 
 “Closing” shall have the meaning ascribed thereto in Section 2.2 of the Equity Subscription Agreement.

 “control” means, when used with respect to any Person, the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling and “controlled” have meanings correlative to the foregoing. 
 “Governmental Authorities” shall have the meaning ascribed thereto in Section 1 of the Equity Subscription
Agreement. 
 “HKD” means Hong Kong Dollars, the lawful currency of Hong Kong. 
  

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 “Investor Director(s)” means the director(s) on the board of directors
of the Company and PDH(HK) nominated by the Investor pursuant to Section 2.1 and/or Section 6.1, or in the case of Beijing Pypo, the director(s) on the board of directors of Beijing Pypo nominated by the Investor pursuant to
Section 2.3. 
 “Law” means any constitutional provision, statute or other law, rule, regulation,
official policy or interpretation of any Governmental Authority and any injunction, judgment, order, ruling, assessment or writ issued by any Governmental Authority. 
 “Listing” shall have the meaning ascribed thereto in Section 8.4 of the Equity Subscription Agreement.

 “Memorandum and Articles” shall have the meaning ascribed thereto in Section 1 of the Equity
Subscription Agreement. 
 “Net Book Value of the Company” means the net value of the assets of the Company,
equal to the original cost of the assets minus the depreciation and amortization, as set forth on the consolidated financial statements of the Company which are (x) complete and correct in all material respects and present fairly the financial
condition and position of the Company as of their respective dates, (y) prepared in accordance with the Hong Kong Financial Reporting Standards applied on a consistent basis, and (z) audited and certified by a “big four”
accounting firm or other independent certified public accountant acceptable to the Investor. 
 “Net
Earnings” means, with respect to Beijing Pypo Group, the net income of Beijing Pypo Group for the applicable fiscal year, minus Non-recurring and Extraordinary Income of Beijing Pypo Group for the respective fiscal year and expenses
incurred as a result of the Investment by the Investor, as set forth on the consolidated financial statements of Beijing Pypo Group which are (x) complete and correct in all material respects and present fairly the financial condition and
position of Beijing Pypo Group as of their respective dates, (y) prepared in accordance with the Hong Kong Financial Reporting Standards applied on a consistent basis, and (z) audited and certified by a “big four” accounting firm
or other independent certified public accountant acceptable to the Investor. 
 “Non-recurring and Extraordinary
Income” means, with respect to Beijing Pypo Group, income or gains arising from events or transactions which, in the reasonable judgment of the Investor and in accordance with the Hong Kong Financial Reporting Standards, possess a
significant degree of abnormality, are of a type not expected to recur in successive accounting periods or are unrelated or only incidentally related to the ordinary and typical activities of Beijing Pypo Group and shall include, without limitation,
(a) the write-back of provisions and other non-recurring non-cash adjustments, (b) income derived from sales or leases of material assets or equipment, (c) income derived from sales of interests in any Subsidiaries, and
(d) others. For purposes of this definition only, any reference to anything being “material” means anything which may involve an amount equivalent to ten (10%) or more of the net income of Beijing Pypo Group as set forth in its
financial statements as of the end of the relevant accounting period. 
  

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 “Ordinary Shares” means the ordinary shares, par value US$0.0001 per
share, of the Company. 
 “Person” means any individual, corporation, partnership, limited partnership,
proprietorship, association, limited liability company, firm, trust, estate or other enterprise or entity. 
 “Plan of
Restructuring” shall have the meaning ascribed thereto in Section 1 of the Equity Subscription Agreement. 
 “PRC” shall have the meaning ascribed thereto in Section 1 of the Equity Subscription Agreement. 
 “Principal Agreements” shall have the meaning ascribed there to in Section 1 of the Equity Subscription Agreement. 
 “Related Parties” shall have the meaning ascribed thereto in Section 1 of the Equity Subscription Agreement.

 “Reserved Company Matters” means the matters set out in Schedule A hereto. 
 “Reserved Beijing Pypo Matters” means the matters set out in Schedule B hereto. 
 “Restructuring” shall have the meaning ascribed thereto in Section 1 of the Equity Subscription Agreement.

 “Retailers” shall have the meaning ascribed thereto in Section 8.3 of the Equity Subscription
Agreement. 
 “RMB” means Renminbi, the lawful currency of PRC. 
 “Shareholders” means (i) as of the date of this Agreement, the Investor, China Bright and Style Tech, and
(ii) the permitted transferees and assigns of any Shareholder. 
 “Subsidiary” means, with respect to a
given Person, any Person that is not a natural Person and that is controlled by such given Person. 
 “Survival
Period” shall have the meaning ascribed thereto in Section 10.1 of Equity Subscription Agreement. 
 “Transfer Date” means, the date following the occurrence of a Triggering Event (as defined below) when the Equity Transfer takes place pursuant to Section 7 hereof, which in any event shall not be later than
July 31, 2008 or July 31, 2009, as applicable. 
 “Valuation Shortfall” means, with respect to each
of the 2007/2008 Fiscal Year and the 2008/2009 Fiscal Year, such amount of valuation shortfall with respect to Beijing Pypo, equaling to 6.4 times of the value by which the Net Earnings arising from Beijing 

  

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Pypo Operations for 2007/2008 Fiscal Year or 2008/2009 Fiscal Year is lower than the respective Earnings Target for that fiscal year, denominated in US
Dollars based on the base exchange rate published by the People’s Bank of China as of the Transfer Date. 
 1.2 Interpretation. For all purposes
of this Agreement, except as otherwise expressly provided, (i) the terms defined in this Section 1 shall have the meanings assigned to them in this Section 1 and include the plural as well as the singular, (ii) all
accounting terms not otherwise defined herein have the meanings assigned under the Hong Kong Financial Reporting Standards, (iii) all references in this Agreement to designated “Sections” and other subdivisions are to the designated
Sections and other subdivisions of the body of this Agreement, (iv) pronouns of either gender or neuter shall include, as appropriate, the other pronoun forms, (v) the words “herein,” “hereof” and “hereunder”
and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision and (vi) all references in this Agreement to designated Schedules, Exhibits and Annexes are to the Schedules, Exhibits
and Annexes attached to this Agreement unless explicitly stated otherwise. 
 SECTION 2. GOVERNANCE MATTERS. 
 2.1 Board of Directors of the Company and PDH(HK). 
 (a) Number of Directors. The board of directors for each of the Company and PDH(HK) shall consist of five (5) individuals. 
 (b) Right to Nominate Directors. The Investor shall have the right to nominate, appoint and maintain in office at least one (1) director on the board of directors of each of the Company and PDH(HK). Upon the death, resignation
or incapacity of such director nominated, the Investor shall be entitled to nominate a replacement thereto. The Investor may appoint or remove the director nominated by it by written notice to the Company or PDH(HK), as the case may be. The
appointment or removal of any Investor Director shall reside only with the Investor and shall take effect when the notice is delivered by the Investor to the Company or PDH(HK), as the case may be, unless the notice indicates otherwise. The Parties
shall use their respective votes in the Company to ensure the Investor Director(s) is appointed to or removed from the board of directors of the Company and PDH(HK) in the manner set out in this Agreement. 
 (c) Committees. The Investor Director(s) shall be appointed to any committees that may be set up by the board of directors of each of the Company
and PDH(HK). 
 (d) Quorum. The quorum for transacting business at any board meeting of each of the Company and PDH(HK) shall be a
majority of the directors (including at least one Investor Director) present (whether in person or by means of a conference telephone or any other equipment which allows all participants in the meeting to speak to and hear each other simultaneously)
when the relevant business is transacted. A director shall be regarded as present for the purpose of a quorum if represented by an alternate director in accordance with Section 2.1(f) below. Notwithstanding the foregoing, if notice of
the board meeting has been duly delivered and such a quorum is not present within one hour from the time appointed for the meeting, the meeting shall stand adjourned to the same day in the next week at the same time and place (or to such other time
or such other place as the directors may determine) and, if at the 

  

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adjourned meeting, the quorum required under this clause is not present within an hour from the time appointed for the meeting, then those director or
directors present at the adjourned meeting shall constitute the requisite quorum for the transaction of business at that adjourned meeting. 
 (e) Board Meetings. Directors may participate in any meeting of the board of directors of each of the Company and PDH(HK) by telephone, video conferencing or other means by which all participants may speak and hear each other, and
any director so participating shall be deemed to be present at such meeting. Board meetings shall be held on a quarterly basis and the Investor Director is entitled to call a special board meeting upon written request to the President, Chief
Executive Officer or the Secretary of the Company or PDH(HK) ten (10) Business Days prior to the designated time of such special board meeting in accordance with the Memorandum and Articles of the Company or the Memorandum and Articles of
Association of PDH(HK), respectively. A written notice of each board meeting, agenda of the business to be transacted at the meeting and all documents and materials to be circulated at or presented to the meeting shall be sent to all Directors at
least five (5) days before the meeting and a copy of the minutes of the meeting shall be sent to the Directors at least five (5) days prior to the next regularly scheduled board meeting. 
 (f) Voting. Subject to Section 2.2, the board of directors of each of the Company and PDH(HK) shall decide on matters by simple
majority vote. Each director shall have one vote. Any director who is absent from a meeting may nominate any other person or persons to act as his or her alternate and to vote in his or her place at the meeting. 
 (g) Expenses. Each of the Company and PDH(HK) shall reimburse all reasonable documented expenses of the Investor Director or the alternates
thereof related to all board meetings. 
 (h) No Liability of the Investor. The Investor shall not, by reason of its ability to
designate and cause the election of the Investor Director hereunder or otherwise, be subject to any liability or obligation whatsoever with respect to the management and affairs of the Company, or otherwise be or become responsible for any debts,
liabilities or obligations of the Company. 
 (i) Directors Insurance and Indemnification. Each of the Company and PDH(HK) shall
purchase director liability insurance for the Investor Director and shall ensure that such policies remain in full force and effect during the period that the Investor Director serves on the board. Each of the Company and PDH(HK) shall indemnify the
Investor Director and the Investor to the maximum extent permitted by applicable Law in accordance with the terms set forth in the Indemnification Agreement with the Investor Director duly executed by the Company or PDH(HK) as applicable.

 2.2 Company Matters Requiring Approval. The Parties shall use their respective powers to ensure that no action or activity falling into the scope
of any of the Reserved Company Matters as set out in Schedule A hereto is taken unless (A) such matter has been approved by a majority of the board of directors of the Company including the approval by at least one Investor Director, or
(B) following the termination of the Investment by the Investor in accordance with Section 8.10 of the Equity Subscription Agreement, such matter in the judgment of the Investor is essential to consummate the redemption in
accordance with Section 8.10 of the Equity Subscription Agreement. 
  

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 2.3 Board of Directors of Beijing Pypo. 
 (a) Number of Directors. The board of directors of Beijing Pypo shall consist of seven (7) individuals. 
 (b) Right to Nominate Directors. The Investor shall have the right to nominate, appoint and maintain in office at least one (1) director on
the board of directors of Beijing Pypo. Upon the death, resignation or incapacity of such director nominated, the Investor shall be entitled to nominate a replacement thereto. The Investor may appoint or remove the director nominated by it by notice
to Beijing Pypo signed by it or on its behalf. The appointment and removal of any Investor Director shall reside only with the Investor and shall take effect when the notice is delivered by the Investor to Beijing Pypo, unless the notice indicates
otherwise. The Parties shall use their respective powers in Beijing Pypo to ensure the Investor Director(s) is appointed to or removed from the board of directors of Beijing Pypo in the manner set out in this Agreement. 
 (c) Committees. The Investor Director(s) shall be appointed to any committees that may be set up by the board of directors of Beijing Pypo.

 (d) Quorum. The quorum for transacting business at any board meeting of Beijing Pypo shall be a majority of the directors
(including at least one Investor Director) present (whether in person or by means of a conference telephone or any other equipment which allows all participants in the meeting to speak to and hear each other simultaneously) when the relevant
business is transacted. A director shall be regarded as present for the purpose of a quorum if represented by an alternate director in accordance with Section 2.3(f) below. Notwithstanding the foregoing, if notice of the board meeting
has been duly delivered and such a quorum is not present within one hour from the time appointed for the meeting, the meeting shall stand adjourned to the same day in the next week at the same time and place (or to such other time or such other
place as the directors may determine) and, if at the adjourned meeting, the quorum required under this clause is not present within an hour from the time appointed for the meeting, then those director or directors present at the adjourned meeting
shall constitute the requisite quorum for the transaction of business at that adjourned meeting. 
 (e) Board Meetings. Directors may
participate in any meeting of the board of directors of Beijing Pypo by telephone, video conferencing or other means by which all participants may speak and hear each other, and any director so participating shall be deemed to be present at such
meeting. Board meetings shall be held on a quarterly basis and the Investor Director is entitled to call a special board meeting upon written request to the President, Chief Executive Officer or the Secretary of Beijing Pypo ten (10) Business
Days prior to the designated date of such special board meeting. A written notice of each board meeting, agenda of the business to be transacted at the meeting and all documents and materials to be circulated at or presented to the meeting shall be
sent to all Directors at least five (5) days before the meeting and a copy of the minutes of the meeting shall be sent to the Directors at least five (5) days prior to the next regularly scheduled board meeting. 
  

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 (f) Voting. Subject to Section 2.4, the board of directors of Beijing Pypo shall
decide on matters by simple majority vote. Each director shall have one vote. Any director who is absent from a meeting may nominate any other person or persons to act as his or her alternate and to vote in his or her place at the meeting.

 (g) Expenses. Beijing Pypo shall reimburse all reasonable documented expenses of the Investor Director or the alternates thereof
related to all board meetings. 
 (h) No Liability of the Investor. The Investor shall not, by reason of its ability to designate and
cause the election of the Investor Director hereunder or otherwise, be subject to any liability or obligation whatsoever with respect to the management and affairs of Beijing Pypo, or otherwise be or become responsible for any debts, liabilities or
obligations of Beijing Pypo. 
 (i) Directors Insurance and Indemnification. Beijing Pypo shall purchase director liability insurance
for the Investor Director and shall ensure that such policies remain in full force and effect during the period that the Investor Director serves on the board. Beijing Pypo shall indemnify the Investor Director and the Investor to the maximum extent
permitted by applicable Law in accordance with the terms set forth in the Indemnification Agreement with the Investor Director duly executed by Beijing Pypo. 
 2.4 Beijing Pypo Matters Requiring Approval. The Parties shall use their respective powers to ensure that no action or activity falling into the scope of any of the Reserved Beijing Pypo Matters as set out in Schedule B hereto
is taken unless (A) such matter has been approved by a majority of the board of directors of Beijing Pypo including the approval by at least one Investor Director, or (B) following the termination of the Investment by the Investor in
accordance with Section 8.10 of the Equity Subscription Agreement, such matter in the judgment of the Investor is essential to consummate the redemption in accordance with Section 8.10 of the Equity Subscription Agreement.

 SECTION 3. TRANSFER RESTRICTIONS. 
 3.1 Restrictions
on Transfers of Ordinary Shares by Style Tech or China Bright. 
 (a) Each of Style Tech and China Bright agrees that from the date hereof
to later of (A) the date of the completion of the Listing, and (B) the date of six (6) months following expiration of the period during which, under applicable Laws, the ability of the Investor to sell, assign, transfer, pledge,
hypothecate or otherwise encumber or dispose of any Ordinary Shares owned by the Investor is restricted, except as in compliance with Section 3.1(b) below, none of Style Tech and China Bright shall, unless with prior written consent of
the Investor, directly or indirectly: 
 (i) sell, assign, transfer, pledge, hypothecate or otherwise encumber or dispose of
any Ordinary Shares; or 
 (ii) enter into any swap or other arrangement that transfers, in whole or in part, any of the
economic consequences of ownership of any Ordinary Shares, 
  

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 whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of the Ordinary
Shares or other equity securities, in cash or otherwise (collectively, the “Transfers”). 
 (b) Each of Style Tech and China
Bright may transfer the Ordinary Shares currently or hereafter owned or held by it in their entirety to its respective wholly-owned subsidiary, provided, however, that (A) the transferor shall, prior to the effectiveness of such
transfer, furnish to the Investor written notice of the name and the address of such transferee and the constitutional documents of such transferee, (B) any such transferee shall receive the transferred Ordinary Shares subject to all the terms
and conditions of this Agreement, execute an Instrument of Accession in the form attached hereto as Exhibit A, and join in each of the Equity Subscription Agreement and this Agreement as a party, (C) the transferor remains liable to all
of its obligations under each of the Equity Subscription Agreement and this Agreement following the transfer if the transferee breaches any provision herein or therein; (D) no partial transfer of the transferor’s equity ownership in the
Company is allowed; and (E) if the transferee loses its status as a wholly-owned subsidiary of the transferor following such transfer, the transferee shall promptly transfer all the transferred Ordinary Shares back to the transferor.

 (c) Any Transfers of the Ordinary Shares not made in conformance with this Agreement shall be null and void, shall not be recorded on the
books of the Company and shall not be recognized by the Company. 
 3.2 Right of First Sale. 
 (a) In the event that either of Style Tech and China Bright (the “Transferor”) proposes to effect a Transfer of any Ordinary Shares to a
Person (the “Transferee”) pursuant to an agreed arrangement, such Transferor shall give the Investor a written notice of its intention to make the Transfer (the “Transfer Notice”), which Transfer Notice shall
include (i) the number of Ordinary Shares to be Transferred (the “Offered Shares”), (ii) the identity of the prospective Transferee, (iii) the consideration to be paid for the Offered Shares (the “Offered
Price”), and (iv) the other material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that such Transferor has received a bona fide firm offer from the prospective Transferee and in
good faith believes a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating
to the proposed Transfer. 
 (b) Within 30 days after the receipt of the Transfer Notice, the Investor shall notify the Transferor as to
whether it would waive the Transferor’s incompliance with Section 3.1 hereof. If the Investor elects to waive, the Transferor shall not sell to such prospective Transferee any Offered Shares unless and until, simultaneously with
such sale, the prospective Transferee shall purchase from the Investor all the Ordinary Shares now or hereafter owned or held by the Investor at the same Offered Price and on the same terms and conditions of the proposed Transfer as described in the
Transfer Notice. 
 (c) If any prospective Transferee refuses to purchase the Ordinary Shares from the Investor, the Transferor shall not
sell to such prospective Transferee any Offered Shares unless 

  

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and until, simultaneously with such sale, the Transferor shall purchase from the Investor all the Ordinary Shares now or hereafter owned or held by the
Investor at the same Offered Price and on the same terms and conditions of the proposed Transfer as described in the Transfer Notice. 
 (d)
Notwithstanding the foregoing, Sections 3.2(b) and 3.2(c) shall not apply and the Investor shall consent to the proposed Transfer if such proposed Transfer in the judgment of the Investor is essential to consummate the redemption in
accordance with Section 8.10 of the Equity Subscription Agreement. 
 3.3 Avoidance of Restrictions. The Parties agree that the Transfer
restrictions in this Agreement shall not be capable of being avoided by the holding of Ordinary Shares indirectly through a Person that can itself be sold in order to dispose of an interest in Ordinary Shares free of such restrictions. Any Transfer
or other disposal of any shares (or other interest) resulting in any change in the control of a Shareholder or of any company (or other entity) having control over that Shareholder shall be treated as being a Transfer of the Ordinary Shares held by
that Shareholder, and the provisions in Section 3 hereof shall thereupon apply in respect of the Ordinary Shares so held. 
 SECTION 4.
INVESTOR PUT OPTION. 
 4.1 Put Option. At any time prior to a Listing, if for more than a 6-month period any member of Beijing Pypo Group loses
its rights to distribute on an exclusive basis all or substantially all of the products of its largest supplier at the time of the Closing of the Investment, the Investor shall have the right (a “Put Option”) to sell to China Bright
and Style Tech all, and not less than all, of the Ordinary Shares now or hereafter owned or held by the Investor; and China Bright and Style Tech hereby agree to buy such Ordinary Shares upon the request of the Investor, for an aggregate amount (the
“Put Option Price”) equal to the Investor’s original investment amount of US$90,000,000, subject to adjustments in accordance with reductions or increases in Investor’s capital contributions to the Company and/or the
Company’s Subsidiaries hereafter, plus an amount of interest accruing thereon from the date the original investment was made at a rate of 15% per annum compounded annually. Unless otherwise agreed between China Bright and Style Tech, China
Bright and Style Tech shall each purchase from the Investor 50% of the Ordinary Shares now or hereafter owned or held by the Investor and pay to the Investor 50% of the Put Option Price by wire transfer of immediately available U.S. dollar funds to
the bank account designated in writing by the Investor. 
 4.2 Exercise of Put Option. The Investor may exercise its Put Option by delivering written
notice thereof to each of the other Shareholders, and the date of such delivery shall be deemed the exercise date for the Put Option. 
 4.3
Completion. The closing of all transactions pursuant to this Section 4 shall be held within three (3) months of the exercise date for the Put Option at such place as the Investor shall designate, or at such time and place and
in such manner (including form of payment) as the parties to the transaction may otherwise mutually agree. If either China Bright or Style Tech fails to pay the Put Option Price within three (3) months of the exercise date for the Put Option,
the Investor may, at its sole discretion, elect to acquire the equity interests in any one or all of the Retailers (the “Retailer Acquisition”) from the Company or Beijing Pypo or an affiliated entity 

  

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thereof for an aggregate amount (the “Retailer Acquisition Consideration”) equal to the original investment amount by the Company or Beijing
Pypo or an affiliated entity thereof, as the case may be, in such Retailers, plus (A) any amounts of registered capital increases in or any shareholders’ loans to such Retailers, and (B) the amount of any increase in the retained
earnings balance of such Retailers as of the date of the Retailer Acquisition from that as of the date of the original investment by the Company or Beijing Pypo or an affiliated entity thereof, each as set forth on the balance sheets of such
Retailers dated as of the date of the Retailer Acquisition and the date of the original investment, respectively, each to be prepared in accordance with the Hong Kong Financial Reporting Standards and audited and certified by a “big four”
accounting firm or other independent certified public accountant acceptable to the Investor. The amount of Retailer Acquisition Consideration which the Company or Beijing Pypo or an affiliated entity thereof, as applicable, is entitled to shall be
offset by the unpaid Put Option Price with any balance to be settled in cash in immediately available U.S. dollar funds payable either by China Bright and Style Tech to the Investor, or by the Investor to the Company or Beijing Pypo or an affiliated
entity thereof, as the case may be. 
 SECTION 5. DRAG-ALONG RIGHT. 
 5.1 Drag-Along Right. If a Listing has not been achieved by June 30, 2009, and the Investor proposes a Liquidation (as defined below) of the Company, then each of the other Shareholders shall consent to
enter into any agreement in connection with, and participate in, such Liquidation; provided that the terms and conditions, including without limitation, the consideration payable with respect to each Ordinary Share as a result of such Liquidation,
are the same (except for cash payments in lieu of fractional shares). In the event such proposed Liquidation is to be brought to a vote at a shareholder meeting, each of the Shareholders agrees to 
 (a) to vote (in person, by proxy or by action by written consent, as applicable) all Ordinary Shares of the Company as to which it has beneficial
ownership in favor of such Liquidation and in opposition of any and all other proposals that could reasonably be expected to delay or impair the ability of the Company to consummate such Liquidation; 
 (b) to refrain from exercising any dissenters’ rights or rights of appraisal under applicable Laws at any time with respect to such Liquidation; and

 (c) to execute and deliver all related documentation and take such other action in support of the Liquidation as shall reasonably be
requested by the Company. 
 5.2 Definitions. For purposes of this Agreement, “Liquidation” of the Company means any liquidation,
dissolution or winding up of the Company and any transaction (treating any series of related transactions as a “transaction”) involving (i) any sale or conveyance by the Company of all or substantially all of its assets (including the
sale or exclusive licensing of all or substantially all the intellectual property assets of the Company); (ii) any merger or consolidation of the Company with or into any other corporation or corporations or other entity or entities or any
other corporate reorganization after which the holders of the Company’s voting securities prior to such transaction own or control less than a majority of the outstanding voting securities of the surviving corporation or other entity on account
of shares held by them prior to the transaction; or (iii) a sale of a majority or all of the outstanding voting securities of the Company. 
  

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 5.3 Except for this Agreement, none of the Parties hereto nor any affiliates thereof shall deposit any shares or
securities of the Company beneficially owned by such party or affiliate in a voting trust or subject any such shares or securities of the Company to any arrangement or agreement with respect to the voting of such shares or securities of the Company.

 5.4 The Investor shall use its commercially reasonable efforts to assist the Company to achieve the Listing by June 30, 2009. 
 SECTION 6. MARCH-IN RIGHTS. 
 6.1 March-in Rights of the
Investor. Until a Listing has been achieved, if an Event of Default (as defined below) has occurred and not been remedied within 30 days following the delivery by the Investor to Beijing Pypo of the default notice in writing, the Parties agree
that the Investor shall have the right to (i) nominate and appoint additional directors to the board of directors of each of the Company, PDH(HK) and Beijing Pypo so that the Investor Directors occupy no less than three-fourths (3/4) of
the positions on the board of directors of each of the Company, PDH(HK) and Beijing Pypo, and (ii) subscribe to additional Ordinary Shares of the Company at the per share purchase price of Net Book Value of the Company divided by the number of
the Ordinary Shares then issued and outstanding immediately prior to such additional equity subscription by the Investor, which shares when purchased, shall be duly and validly issued, fully paid and non-assessable, free from any liens and free of
restrictions on transfer (except for any restrictions on transfer under applicable securities laws), so that the Investor owns beneficially and of record no less than three-fourths (3/4) of the equity securities of the Company. 
 6.2 Definition. For purposes of this Agreement, the “Event of Default” shall mean any of the following: 
 (a) any undertakings by the Company or Beijing Pypo in contravention of Section 2.2 or Section 2.4 hereof; 
 (b) any denials by any Parties of the Investor’s information and inspection rights as set forth in Section 8.5 of the Equity
Subscription Agreement; 
 (c) any non-performance by any Parties of its respective obligations under Section 7 hereof; OR

 (d) any breaches by any Parties of material provisions of any of the Principal Agreements. 
 6.3 Each of China Bright and Style Tech agrees to vote, or causes to be voted, all Ordinary Shares owned by each of them and to take all actions in whatever manner as
shall be necessary to carry out the provisions of this Section 6. 
 6.4 The Parties agree that this Section 6, however, shall be
removed for the purposes of preparing for a Listing, but shall be promptly reinstated if a Listing is not successfully achieved. 
  

 12 

 SECTION 7. CONDITIONAL EQUITY TRANSFER AND ACCEPTANCE OF EQUITY TRANSFER. 
 7.1 On and subject to the terms of this Agreement, upon the occurrence of any Triggering Event, China Bright and Style Tech shall each transfer as legal and beneficial
owner, the Transferred Ordinary Shares (as defined below) to the Investor, and the Investor shall acquire such Transferred Ordinary Shares from each of China Bright and Style Tech on and with effect from the Transfer Date, free from all charges,
liens, encumbrances, claims or restrictions of any nature whatsoever and together with all rights attaching or accruing to the Transferred Ordinary Shares and all dividends and distributions declared, made or paid thereon or in respect thereof on or
after the Transfer Date (the “Equity Transfer”). 
 7.2 For the purposes of this Agreement, the Triggering Event shall mean any of the
following: 
 (a) Net Earnings arising from Beijing Pypo Operations of 2007/2008 Fiscal Year is less than 2007/2008 Fiscal Year Earnings
Target; 
 (b) Net Earnings arising from Beijing Pypo Operations of 2008/2009 Fiscal Year is less than 2008/2009 Fiscal Year Earnings Target.

 7.3 For the purposes of this Agreement, the Transferred Ordinary Shares shall mean such number of
Ordinary Shares equal to  1/2×(A×(B/(C+B-D))-E) ×(F/E), where 
 A=the total number of the issued and outstanding Ordinary Shares as of the date hereof; 
 B=the total investment amount by the Investor in the Company and the Company’s Subsidiaries, which is US$90,000,000; 
 C=the implied equity valuation of Beijing Pypo, which is US$182,700,000; 
 D=the amount of Valuation Shortfall; and 
 E=the number of Ordinary Shares subscribed to by the Investor
pursuant to the Equity Subscription Agreement, which is 90,000,000. 
 F=the number of Ordinary Shares held or owned by the Investor and its
Affiliates in aggregate immediately prior to the Triggering Event. 
 7.4 Subject to the terms and conditions of this Agreement, on the Transfer Date:

 (a) the Investor shall pay in cash to each of China Bright and Style Tech US$1.00 as payment in full for the Transferred Ordinary Shares;

 (b) each of China Bright and Style Tech shall deliver to the Investor duly executed instruments of transfer in favor of the Investor for
the Transferred Ordinary Shares and submit to the Company the certificate or certificates representing the Ordinary Shares for cancellation to effect the transfer of the Transferred Ordinary Shares; and 
  

 13 

 (c) the Company shall update its register of members to reflect such Equity Transfer and shall
(A) deliver a copy of such updated register of members to each of the Investor, China Bright and Style Tech and (B) deliver to the Investor a certificate or certificates representing such number of the Ordinary Shares as equal to
A×(B/(C+B-D))-E) ×(F/E) (with “A”, “B”, “C”, “D”, “E”, and “F” each as defined in Section 7.3 above) as soon as practicable hereafter. 
 SECTION 8. REPRESENTATIONS AND WARRANTIES. 
 8.1 Each of the Parties
hereby represents and warrants to each of the other Parties that (i) such Party has all requisite right, capacity, power and authority to enter into, conclude and perform each of its obligations under this Agreement; (ii) the execution of
this Agreement, and the performance of each of such Party’s obligations under this Agreement by such Party does not violate the rights of any Person or requires any approval, authorization, permits, or waiver from, or registrations,
qualification, declaration, or filings with any Governmental Authorities; (iii) upon execution of this Agreement by such Party, this Agreement shall constitute a legal, valid and binding contract of such Party, (iv) such Party will not
claim on any ground that this Agreement is invalid, illegal or unenforceable, and (v) the Equity Transfer upon occurrence of an Triggering Event is part of the consideration for the investment by the Investor in the Company and its Subsidiaries
pursuant to the Equity Subscription Agreement. 
 8.2 Each of the Company, PDH(HK), Beijing Pypo, China Bright, Style Tech, and the Sponsors hereby
represents and warrants jointly and severally to the Investor (i) that the Restructuring has been completed as of the date of this Agreement in accordance with the Plan of Restructuring and to the satisfaction of the Investor, (ii) that
the Restructuring was completed in compliance with all applicable Laws, and did not result in any violation, breach or default of or under any constitutional documents of any Affiliated Entities or Material Contracts. 
 8.3 Each of China Bright and Style Tech and the Sponsors hereby represents and warrants to the Investor (i) that it owns the Transferred Ordinary Shares free and
clear of any liens, encumbrances and third party rights, and (ii) that upon the delivery of the Transferred Ordinary Shares to the Investor, the Investor shall acquire good and marketable title to and complete ownership of the Transferred
Ordinary Shares, free of any liens, encumbrances and third party rights. 
 8.4 Each of China Bright, Style Tech and the Sponsors hereby represents and
warrants to the Investor (i) that the Equity Transfer pursuant to this Agreement will not violate any applicable Laws, including without limitation foreign exchange control rules and securities laws and regulations, and (ii) that no
consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any Governmental Authority on the part of China Bright or Style Tech is required in connection with the transactions contemplated
hereunder. 
 SECTION 9. CONTINUING COVENANTS. 
 9.1
Liens, Pledges and Restrictions on Ordinary Shares. Each of China Bright and Style Tech hereby agrees that none of the Ordinary Shares or any other equity securities of the Company currently or hereafter owned or held by it shall be
subjected, after the date of this Agreement, to any mortgage, pledge, claim, security interest, encumbrance, title defect, lien, charge or other restriction or limitation, unless approved in advance in writing by the Investor. 
  

 14 

 9.2 Grant of Power of Attorney. The Parties agree that the Company or the Investor, as the case may be, is hereby
granted an irrevocable power of attorney by each of the Shareholders, to vote all shares owned by such Shareholder, to execute and deliver all the related documents or to take any other actions to implement the provisions of and to achieve the
purposes of this Agreement, upon and only upon the failure of any such Shareholder to vote its shares, execute and deliver the related documents, or take any other actions as reasonably requested by the Company or the Investor, to implement the
provisions of and to achieve the purposes of this Agreement (including without limitation those set forth in Sections 2, 3.1(b), 5.1, and 6.3). 
 9.3 Triggering Events. Upon the occurrence of a Triggering Event, the Sponsors will cause Style Tech to promptly effect the Equity Transfer and perform its obligations hereunder. 
 9.4 Further Assurance. Each of China Bright, Style Tech, the Company, PDH(HK), Beijing Pypo and the Sponsors agrees to execute such further instruments, documents
and other writings, and to take such further actions as may be reasonably necessary to carry out the full intent of this Agreement. 
 SECTION 10.
INDEMNIFICATION. 
 10.1 Survival of Representations and Warranties. The representations and warranties set forth under
Section 8 shall survive for the Survival Period, and such warranties and representations shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of the Investor. 
 10.2 Indemnity. 
 (a) Each of the Parties other than
the Investor shall jointly and severally indemnify the Investor for any losses, liabilities, damages, liens, penalties, costs and expenses, including reasonable advisor’s fees and other reasonable expenses of investigation and defense of any of
the foregoing (but excluding any consequential, speculative or punitive damages) (collectively, the “Losses”), incurred by Investor as a result of (A) any breach or violation of any representation or warranty made by such Party
contained herein, or (B) any breach by such Party of any covenant or agreement contained herein. 
 (b) If the Investor believes that it
has a claim that may give rise to an indemnity obligation hereunder, it shall give prompt notice thereof to the applicable Party stating specifically the basis on which such claim is being made, the material facts related thereto, and the amount of
the claim asserted, provided that any such notice with respect to the breach of any representation or warranty shall be given within the Survival Period; provided further that any such notice with respect to the breach of any
covenant or agreement shall be given on a timely basis. 
 10.3 This Section 10 shall not be deemed to preclude or otherwise limit in any way the
exercise of any other rights or pursuit of any other remedied for the breach of the representations, warranties or covenants and agreements hereunder 
  

 15 

 SECTION 11. MISCELLANEOUS. 
 11.1 Supremacy of this Agreement. If the provisions of this Agreement or other Principal Agreements conflict with the Memorandum and Articles of the Company, the constitutional documents of PDH(HK), Beijing Pypo or any other
Affiliated Entities or any agreements or understanding among the parties, the provisions of this Agreement shall prevail as among the Parties. Further, the Parties shall: 
 (a) exercise all voting and other rights and powers available to them to give effect to the provisions of this Agreement and the other Principal Agreements; and 
 (b)(if necessary) ensure that any required amendment is made to the Memorandum and Articles of the Company and/or constitutional document of PDH(HK),
Beijing Pypo or any other Affiliated Entities. 
 11.2 Legending. Each existing or replacement certificate for Ordinary Shares now owned or hereafter
acquired by China Bright or Style Tech shall bear the following legend on its face: 
 “THE SALE, PLEDGE, HYPOTHECATION, ASSIGNMENT OR
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN SHAREHOLDERS AND SPONSORS AGREEMENT, BY AND BETWEEN THE HOLDER HEREOF, THE COMPANY AND THE OTHER PARTIES THERETO. COPIES OF SUCH
AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.” 
 11.3 Successors and Assigns. 
 (a) The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the Parties hereto, their successors and permitted
assigns and their legal representatives. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the Parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities
under or by reason of this Agreement. 
 (b) Prior to the Listing, the rights of the Investor set forth in this Agreement are not assignable
to any person who holds or is acquiring the Ordinary Shares from the Investor unless the Investor receives prior approval from China Bright and Style Tech, provided, however, that the rights of the Investor set forth in this Agreement
are assignable to any Affiliate of the Investor who holds or is acquiring the Ordinary Shares from the Investor. No right or obligation of any other Party set forth in this Agreement may be assigned without the prior written consent of the Investor.
With respect to all assignments, the other Parties to this Agreement shall be given written notice at the time of such assignment by the assigning Party stating the name and address of the assignee and if applicable, identifying the number of the
Ordinary Shares as to which the rights in question are being assigned; and any such assignee shall receive such assigned rights subject to all the terms and conditions of this Agreement. 
  

 16 

 11.4 Governing Law. This Agreement shall be governed by and construed under the laws of Hong Kong, without regard
to principles of conflicts of law thereunder. 
 11.5 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument. 
 11.6 Headings and Titles. Headings and titles used in
this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 
 11.7 Notices. Any notice
required or permitted pursuant to this Agreement shall be given in writing and shall be given either personally or by sending it by next-day or second-day courier service, fax, electronic mail or similar means to the address as shown below the
signature of such Party on the signature page of the Equity Subscription Agreement (with respect to PDH(HK), to 48/F, Bank of China Tower, 1 Garden Road, Central, Hong Kong) (or at such other address as such Party may designate by fifteen
(15) days’ advance written notice to the other Parties hereto in accordance with this Section 11.7). Where a notice is sent by next-day or second-day courier service, service of the notice shall be deemed to be effected by
properly addressing, pre-paying and sending by next-day or second-day service through an internationally-recognized courier a letter containing the notice, with a confirmation of delivery, and to have been effected at the expiration of two
(2) days after the letter containing the same is sent as aforesaid. Where a notice is sent by fax or electronic mail, service of the notice shall be deemed to be effected by properly addressing, and sending such notice through a transmitting
organization, with a written confirmation of delivery, and to have been effected on the day the same is sent as aforesaid. 
 11.8 Dispute Resolution.

 (a) Any dispute, controversy or claim arising out of or relating to this Agreement, or the interpretation, breach, termination or validity
hereof, shall first be subject to resolution through consultation of the Parties to such dispute, controversy or claim. Such consultation shall begin within seven (7) days after one Party hereto has delivered to any other Party(ies) hereto a
written request for such consultation. If within thirty (30) days following the commencement of such consultation the dispute cannot be resolved, the dispute shall be submitted to arbitration upon the request of either Party with notice to the
other. 
 (b) The arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong International Arbitration Centre (the
“Centre”). There shall be three arbitrators. Each party in the dispute shall select one arbitrator within thirty (30) days after giving or receiving the demand for arbitration. Such arbitrators shall be freely selected, and the
Parties shall not be limited in their selection to any prescribed list. The Chairman of the Centre shall select the third arbitrator, who shall be qualified to practice law in Hong Kong. If either party does not appoint an arbitrator who has
consented to participate within thirty (30) days after selection of the first arbitrator, the relevant appointment shall be made by the Chairman of the Centre. 
 (c) The arbitration proceedings shall be conducted in English. The arbitration tribunal shall apply the Arbitration Rules of the Centre in effect at the time of the arbitration. However, if such rules are in conflict
with the provisions of this Section 11.8, including the provisions concerning the appointment of arbitrators, the provisions of this Section 11.8 shall prevail. 
  

 17 

 (d) The arbitrators shall decide any dispute submitted by the Parties to the arbitration strictly in
accordance with the substantive Laws of Hong Kong and shall not apply any other substantive Law. 
 (e) Each Party hereto shall cooperate
with the others in making full disclosure of and providing complete access to all information and documents requested by the others in connection with such arbitration proceedings, subject only to any confidentiality obligations binding on such
Party. 
 (f) The award of the arbitration tribunal shall be final and binding upon the disputing Parties, and either Party may apply to a
court of competent jurisdiction for enforcement of such award. 
 (g) Either Party shall be entitled to seek preliminary injunctive relief,
if possible, from any court of competent jurisdiction pending the constitution of the arbitral tribunal. 
 11.9 Expenses. If any action at law or in
equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be
entitled. 
 11.10 Entire Agreement: Amendments and Waivers. This Agreement and Equity Subscription Agreement and any other agreement executed as of
the date hereof, together with all schedules and exhibits hereto and thereto, constitute the entire agreement among the Parties. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively) by the mutual consent of the Parties. Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof will not be deemed a waiver of
such term, covenant, or condition, nor will any waiver or relinquishment of, or failure to insist upon strict compliance with, any right, power or remedy power hereunder at any one or more times be deemed a waiver or relinquishment of such right,
power or remedy at any other time or times. 
 11.11 Severability. If one or more provisions of this Agreement are held to be unenforceable under
applicable Law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 
 11.12 No Presumption. The Parties acknowledge that any applicable Law that would require interpretation of any claimed ambiguities in this Agreement
against the drafting party has no application and is expressly waived. If any claim is made by a Party relating to any conflict, omission or ambiguity in the provisions of this Agreement, no presumption or burden of proof or persuasion will be
implied because this Agreement was prepared by or at the request of any Party or its counsel. 
 11.13 Specific Performance. Each of the parties
hereto recognizes and acknowledges that a breach by it of any covenants or agreements contained in this Agreement will cause the other 

  

 18 

 
party to sustain damage for which it would not have an adequate remedy at law for money damages, and therefore each of the parties hereto agrees that in the
event of any such breach the aggrieved party shall be entitled to the remedy of specific performance of such covenants and agreements and injunctive and other equitable relief in addition to any other remedy to which it may be entitled, at law or in
equity. 
 11.14 Termination. This Agreement shall terminate upon the earlier of (i) the consummation of a Listing, and (ii) the date
neither the Investor nor its Affiliate holds any Ordinary Shares; provided that the provisions in Sections 2, 10 and 11 except for Section 11.1, shall survive the termination; provided further that
prior to the termination of the Agreement, the Parties shall enter into a new agreement in the form reasonably acceptable to the Investor. 
 11.15 Use of
English Language. This Agreement has been executed and delivered in the English language. Any translation of this Agreement into another language shall have no interpretive effect. All documents or notices to be delivered pursuant to or in
connection with this Agreement shall be in the English language or, if any such document or notice is not in the English language, accompanied by an English translation thereof, and the English language version of any such document or notice shall
control for purposes thereof. 
 [The remainder of this page has been left intentionally blank] 
  

 19 

 IN WITNESS WHEREOF, the Parties have executed this Agreement as a DEED as of the date first above
written. 
 COMPANY: 
  

					
	The COMMON SEAL of	 		 	)
			
	PYPO DIGITAL COMPANY LIMITED	 		 	)
			
	was affixed to this Deed by	 		 	)
			
	 /s/    Kam Yuen
	 	,	 	)
			
	its director	 		 	)
			
	in the presence of:	 		 	)

  

					
	Witness’ signature	 	:	 	 /s/    Kong Kam Yu

	Witness’ name	 	:	 	  

	Witness’ address	 	:	 	  

		 		 	  

	Witness’ occupation	 	:	 	  

  

 20 

 PDH(HK) 
  

					
	The COMMON SEAL of	 		 	)
			
	PYPO HOLDINGS (HK) COMPANY LIMITED	 		 	)
			
	was affixed to this Deed by	 		 	)
			
	 /s/    Kam Yuen
	 	,	 	)
			
	its director	 		 	)
			
	in the presence of:	 		 	)

  

					
	Witness’ signature	 	:	 	 /s/    Kong Kam Yu

	Witness’ name	 	:	 	  

	Witness’ address	 	:	 	  

		 		 	  

	Witness’ occupation	 	:	 	  

  

 21 

 BEIJING PYPO: 
  

									
	The COMMON SEAL of	 		 	)
			
	BEIJING PYPO TECHNOLOGY GROUP COMPANY LIMITED	 		 	)
			
	was affixed to this Deed by	 		 	)
			
	 /s/    Zhang Kuo
	 	,	 	)
			
	its Chairman of the Board of Directors	 		 	)
			
	in the presence of:	 		 	)
			
	Witness’ signature	 	:	 	 /s/    Ally Zhu

	Witness’ name	 	:	 	Ally Zhu	 		 	
	Witness’ address	 	:	 	31 Floor, China World Tower One	 		 	
		 		 	Beijing 100004, China	 		 	
	Witness’ occupation	 	:	 	Attorney of Law	 		 	

  

 22 

 SHAREHOLDERS: 
  

					
	The COMMON SEAL of	 		 	)
			
	ARCH DIGITAL HOLDINGS LTD.	 		 	)
			
	was affixed to this Deed by	 		 	)
			
	Clement Kwong	 		 	)
			
	 /s/    Clement Kwong
	 	,	 	)
			
	its Director	 		 	)
			
	in the presence of:	 		 	)

  

					
	Witness’ signature	 	:	 	 /s/    Harry Lin

	Witness’ name	 	:	 	Harry Lin
	Witness’ address	 	:	 	APO Advisors (HK) Limited
		 		 	Suite 4703, Tower 2, Plaza 66,
		 		 	1366 Nanjing Road West, Shanghai
	Witness’ occupation	 	:	 	Associate Director

  

 23 

 SHAREHOLDERS: 
  

					
	The COMMON SEAL of	 		 	)
			
	CHINA BRIGHT GROUP CO., LTD.	 		 	)
			
	was affixed to this Deed by	 		 	)
			
	 /s/    Kam Yuen
	 	,	 	)
			
	its director	 		 	)
			
	in the presence of:	 		 	)

  

					
	Witness’ signature	 	:	 	 /s/    Kong Kam Yu

	Witness’ name	 	:	 	  

	Witness’ address	 	:	 	  

		 		 	  

	Witness’ occupation	 	:	 	  

  

 24 

 SHAREHOLDERS: 
  

					
	The COMMON SEAL of	 		 	)
			
	STYLE TECHNOLOGY	 		 	
	DEVELOPMENT LIMITED	 		 	)
			
	was affixed to this Deed by	 		 	)
			
	 /s/    Chan Yuk Han
	 	,	 	)
			
	its director	 		 	)
			
	in the presence of:	 		 	)

  

					
	Witness’ signature	 	:	 	 /s/    Kong Kam Yu

	Witness’ name	 	:	 	Kong Kam Yu Sammy
	Witness’ address	 	:	 	  

		 		 	  

	Witness’ occupation	 	:	 	  

  

 25 

 SPONSORS: 
  

									
	SIGNED, SEALED and DELIVERED	 		 	)
	by ZHANG Kuo

	 		 	)
	 /s/    ZHANG Kuo
	 		 	)
	in the presence of:	 		 	)
			
	Witness’ signature	 	:	 	 /s/    Ally Zhu

	Witness’ name	 	:	 	Ally Zhu	 		 	
	Witness’ address	 	:	 	31 Floor, China World Tower One	 		 	
		 		 	Beijing 100004, China	 		 	
	Witness’ occupation	 	:	 	Attorney of Law	 		 	

  

									
	SIGNED, SEALED and DELIVERED	 		 	)
	by FEI Dongping

	 		 	)
	 /s/    FEI Dongping
	 		 	)
	in the presence of:	 		 	)
			
	Witness’ signature	 	:	 	 /s/    Ally Zhu

	Witness’ name	 	:	 	Ally Zhu	 		 	
	Witness’ address	 	:	 	31 Floor, China World Tower One	 		 	
		 		 	Beijing 100004, China	 		 	
	Witness’ occupation	 	:	 	Attorney of Law	 		 	

  

									
	SIGNED, SEALED and DELIVERED	 		 	)
	by Francis WAN

	 		 	)
	 /s/    Francis Wan
	 		 	)
	in the presence of:	 		 	)
			
	Witness’ signature	 	:	 	 /s/    Ally Zhu

	Witness’ name	 	:	 	Ally Zhu	 		 	
	Witness’ address	 	:	 	31 Floor, China World Tower One	 		 	
		 		 	Beijing 100004, China	 		 	
	Witness’ occupation	 	:	 	Attorney of Law	 		 	

  

 26 

 SCHEDULE A 
 RESERVED COMPANY MATTERS 
  

	A.	change in the scope and nature of the business of the Company; 

  

	B.	amendment of the constitutional documents of the Company; 

  

	C.	any change in the capitalization of the Company; 

  

	D.	any major corporate transaction by the Company, including any investment, acquisition, merger, business combination or disposal of assets involving payments in an aggregate amount
of HKD equivalent of US$9,000,000 or more within any consecutive twelve-month period; 

  

	E.	employment or engagement by the Company of any new employee, officer or consultant involving payment of aggregate compensation (including benefits) of HKD 1,000,000 or more per
annum; 

  

	F.	disengagement of current auditors or engagement of new auditors by the Company, other than the auditors’ voluntary resignation; 

  

	G.	except in the ordinary course of business, any loans or advances by the Company or its Subsidiaries to any Person in an aggregate amount of HKD 1,500,000 or more;

  

	H.	except in the ordinary course of business, any assumption of any third party liability by the Company or guarantee by the Company for any third party liability in an aggregate
amount of more than HKD 1,500,000; 

  

	I.	except in the ordinary course of business, any transactions by the Company with its Related Parties involving an aggregate amount of more than HKD 500,000 within any consecutive
twelve-month period; 

  

	J.	initiation or settlement by the Company of any material litigation with a controversy amount of more than HKD 5,000,000; 

  

	K.	cessation of the business operations or the liquidation, dissolution or winding up of the Company; 

  

	L.	Listing; 

  

	M.	execution by the Company of any agreement with its shareholders; 

  

	N.	declaration or payment of dividend or other distribution to its members prior to the Listing; 

  

	O.	any other undertakings by the Company which has or may have a material impact on the rights, obligations, or liabilities of the Investor, or would likely result in the dilution of
the equity interest of the Investor in the Company, or lead to an impairment of the value of the equity interest of the Investor in the Company. 

  

 — 1 — 

 SCHEDULE B 
 RESERVED BEIJING PYPO MATTERS 
  

	A.	material change in the scope and nature of business of any member of Beijing Pypo Group; 

  

	B.	amendment of the constitutional documents of any member of Beijing Pypo Group; 

  

	C.	adoption or amendment of the annual business plan, operation budget (which shall include provisions for debt level, inventory level and level of receivables) and related financing
plans (including in relation to equity and debt) for Beijing Pypo; 

  

	D.	any change in the capital structure of any member of Beijing Pypo Group, any alteration or reorganization of the share or registered capital of any member of Beijing Pypo Group,
including, without limitation, any increase, reduction, consolidation, subdivision or conversion thereof, or the rights in respect of any share capital; 

  

	E.	any major corporate transaction undertaken by any member of Beijing Pypo Group or its Subsidiaries, including any investment, acquisition, merger, business combination or disposal
of assets involving payments in an aggregate amount of RMB equivalent of US$9,000,000 or more within any consecutive twelve-month period; 

  

	F.	employment or engagement by any member of Beijing Pypo Group of any new employee, officer or consultant involving payment of aggregate compensation (including benefits) of RMB
1,000,000 or more per annum; 

  

	G.	disengagement of current auditors or engagement of new auditors by any member of Beijing Pypo Group, except for their voluntary resignation; 

  

	H.	declaration of any dividends or making any payments of dividends by any member of Beijing Pypo Group; 

  

	I.	except in the ordinary course of business, any loans or advances by any member of Beijing Pypo Group to third parties in an aggregate amount of RMB 1,500,000 or more;

  

	J.	except in the ordinary course of business, any assumption of any third party liability by any member of Beijing Pypo Group or guarantee by any member of Beijing Pypo Group for any
third party liability in an aggregate amount of more than RMB 1,500,000; 

  

	K.	except in the ordinary course of business, any transactions by any member of Beijing Pypo Group with its Related Parties involving an aggregate amount of more than RMB 500,000
within any consecutive twelve-month period; 

  

	L.	initiation or settlement by any member of Beijing Pypo Group of any material litigation with a controversy amount of more than RMB 5,000,000; 

  

 — 2 — 

	M.	the cessation of the business operations or the liquidation, dissolution or winding up of any member of Beijing Pypo Group; 

  

	N.	any undertakings by any member of Beijing Pypo which has or may have a material impact on the rights, obligations, or liabilities of the Investor, or would result in the dilution of
the equity interest of the Investor in Beijing Pypo, or lead to an impairment of the value of the equity interest of the Investor in Beijing Pypo. 

  

 — 3 — 

 EXHIBIT A 
 FORM OF INSTRUMENT OF ACCESSION 
 THIS INSTRUMENT OF ACCESSION (this “Instrument”)
is made as of [Insert Date] by [Insert the Name of the Transferee] (the “Transferee”). Reference is made to that certain Shareholders and Sponsors Agreement, dated as of October 15th, 2007 by and among Pypo
Digital Company Limited (the “Company”), ARCH Digital Holdings Ltd. (the “Investor”) and the other parties thereto, as amended from time to time, that certain Equity Subscription Agreement, dated as of
October 15th, 2007 by and among the Company, the Investor and the other parties thereto, as amended from time to time, and that certain Commitment and Non-Compete Agreement, dated as of
[            ], 2007 by and among the Company, the Investor and the other parties thereto, as amended from time to time (collectively, the “Agreements”). The Transferee, as
a condition precedent to becoming the owner or holder of record of [Insert Number of Shares] of Ordinary Shares (the “Transferred Securities”) of the Company, hereby agrees to join each of the three Agreements as a party
thereto and to be bound by and hold the Transferred Securities subject to all the obligations of [Insert the Name of the Transferor] under each of the three Agreements as if the Transferee were an original party thereto. 
 This Instrument shall take effect and shall become an integral part of each of the three Agreements immediately upon execution and delivery to the
Company of this Instrument. By signing below, the Company acknowledges receipt of written notice of the assignment to the Transferee of the Transferred Securities. 
 IN WITNESS WHEREOF, this Instrument has been duly executed by the Transferee as of the date first above written. 
  

			
	[Insert Transferee]
		
	By:	 	  

	Name:	 	
	Title:	 	

 ACCEPTED: 
 PYPO DIGITAL COMPANY LIMITED 
  

			
	by:	 	  

	Name:	 	
	Title:	 	

 Date: 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	SECTION 1.	  	INTERPRETATION	  	2
			
	SECTION 2.	  	GOVERNANCE MATTERS	  	5
			
	SECTION 3.	  	TRANSFER RESTRICTIONS	  	8
			
	SECTION 4.	  	INVESTOR PUT OPTION	  	10
			
	SECTION 5.	  	DRAG-ALONG RIGHT	  	11
			
	SECTION 6.	  	MARCH-IN RIGHTS	  	12
			
	SECTION 7.	  	CONDITIONAL EQUITY TRANSFER AND ACCEPTANCE OF EQUITY TRANSFER	  	13
			
	SECTION 8.	  	REPRESENTATIONS AND WARRANTIES	  	14
			
	SECTION 9.	  	CONTINUING COVENANTS	  	14
			
	SECTION 10.	  	INDEMNIFICATION	  	15
			
	SECTION 11.	  	MISCELLANEOUS	  	16Equity Subscription Agreement

 Exhibit 10.40 
 Execution Copy 
 EQUITY SUBSCRIPTION AGREEMENT 
 THIS EQUITY SUBSCRIPTION AGREEMENT (this “Agreement”) is made as of October 15th, 2007, by and among 
 (i) PYPO DIGITAL COMPANY LIMITED (the “Company”), an exempted company incorporated and existing under the Laws of the Cayman Islands;

 (ii) BEIJING PYPO TECHNOLOGY GROUP COMPANY LIMITED 

 (“Beijing Pypo”), a limited company incorporated and existing under the Laws of the People’s Republic of China; 
 (iii) ARCH Digital Holdings Ltd. (the “Investor”), an exempted company incorporated and existing under the Laws of the British Virgin Islands; 
 (iv) Golden Meditech Company Limited 

 (“Golden Meditech”), a company incorporated under the Laws of the Cayman Islands, the shares of which are listed on the Growth Enterprise Market (“GEM”) of the Stock Exchange of
Hong Kong Limited (the “Hong Kong Stock Exchange”) as “8180.HK”; 
 (vi) China Bright Group Co., Ltd. 

 (“China Bright”), a company incorporated under the Laws of the Hong Kong Special Administrative Region of the People’s Republic of China (“Hong Kong”); 
 (v) Style Technology Development Limited 

 (“Style Tech”), a company incorporated under the Laws of Hong Kong; and 
 (vi)
Mr. ZHANG Kuo 

 a citizen of the People’s Republic of China (“Zhang”), Mr. FEI Dongping 

 a citizen of the People’s Republic of China (“Fei”), and Mr. Francis WAN 

 a resident of Hong Kong (“Wan”, and together with Golden Meditech, China Bright, Style Tech, Zhang and Fei, the “Sponsors”). 
 The foregoing parties shall be hereinafter referred to collectively as the “Parties” and individually as a “Party”.

 RECITALS 
 WHEREAS,
Golden Meditech owns beneficially and of record all the equity securities of China Bright; 
 WHEREAS, Wan owns beneficially and of record
all the equity securities of Trend Focus Limited (the “Trend Focus”), a company incorporated and existing under the Laws of British Virgin Islands, which in turn owns beneficially and of record all the equity securities of Style
Tech; 
  

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 Execution Copy 
 WHEREAS, the Company owns beneficially and of record all the equity securities of Pypo Holdings (HK) Company Limited (“PDH(HK)”), a company incorporated and existing under the Laws of Hong Kong; 

 

 2 

 WHEREAS, each of China Bright and Style Tech owns beneficially and of record 50% of the equity securities
of the Company; 
 WHEREAS, it is contemplated that immediately prior to and after the Closing PDH(HK) will own all the registered capital of
Beijing Pypo; and 
 WHEREAS, the Company, the Investor, Beijing Pypo and the Sponsors desire to enter into this Agreement, pursuant to which
the Investor will make a capital contribution to the Company of US$90,000,000 at the Closing in exchange for 33% enlarged equity interests in the Company (the “Investment”); 
 WITNESSETH 
 NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants and agreements undertaken in this Agreement, the sufficiency and adequacy of which the Parties hereby acknowledge, the Parties, intending to be legally bound, hereby agree as follows: 
 1. Definitions. The following terms are not defined in the text of the Agreement and shall have the meanings ascribed to them below: 
 “Affiliate” means, with respect to a Person, any other Person that, directly or indirectly, Controls, is Controlled by or
is under common Control with such Person. 
 “Beijing Pypo Group” means Beijing Pypo and each Person that is,
directly or indirectly, Controlled by Beijing Pypo. 
 “Contract” means a legally binding contract,
agreement, understanding, indenture, note, bond, loan, instrument, lease, mortgage, franchise, or license, whether oral or in writing. 
 “Control” of a given Person means the power or authority, whether exercised or not, to direct the business, management and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise, which power or authority shall conclusively be presumed to exist upon possession of beneficial ownership or power to direct the vote of more than fifty percent (50%) of the votes
entitled to be cast at a meeting of the members or shareholders of such Person or power to control the composition of a majority of the board of directors of such Person; the term “Controlled” has the meaning correlative to the foregoing.

 “Environmental Law” means any and all applicable current or future PRC or non-PRC national, federal,
state, or local Law, statutes, rules, regulation, order, ordinance, guidance document, judgment, authorization by any Governmental Authority, or any other requirement of any Governmental Authority relating to (a) environmental matters,
(b) the generation, use, storage, transportation or disposal of Hazardous Substances, or (c) occupational safety and health, industrial hygiene, handling and disposal of medical waste, land use or the protection of human, plant or animal
health or welfare, in any manner applicable to any member of Beijing Pypo Group. 
  

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 “Governmental Authority” means any nation or government or any province
or state or any other political subdivision thereof; any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any government authority, agency,
department, board, commission or instrumentality or any political subdivision thereof, any court, tribunal or arbitrator, and any self-regulatory organization. 
 “Guaranteed Net Profit” means with respect to each Retailer (as defined in Section 8.3 below), the annualized net
profit for the first audited fiscal year of such Retailer, as set forth in the audited financial statements of such Retailer, provided as a schedule to the respective Retailer acquisition agreement, which financial statements shall be audited and
certified by an independent certified public accountant acceptable to the Investor. 
 “Hazardous Substances”
means (but shall not be limited to) substances that are defined or listed in, or otherwise classified pursuant to, any Environmental Laws as “hazardous substances,” “hazardous materials,” “hazardous wastes” or
“toxic substances,” or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitibility, corrosivity, reactivity, radioactivity, carcinogenicity, reproductive toxicity or
“EP toxicity,” and specifically including petroleum and all derivatives thereof or synthetic substitutes therefore, asbestos or asbestos-containing materials, and medical waste. 
 “Intellectual Property” means all patents, patent applications, trademarks, service marks, trade names, copyrights, trade
secrets, processes, compositions of matter, formulas, designs, inventions, proprietary rights, know-how and any other confidential or proprietary information owned or otherwise used by Beijing Pypo Group. 
 “Key Employees” means collectively, Zhang, the Chairman of the Board of the Directors of Beijing Pypo, and Fei, the Chief
Executive Officer of Beijing Pypo. 
 “Law” means any constitutional provision, statute or other law, rule,
regulation, official policy or interpretation of any Governmental Authority and any injunction, judgment, order, ruling, assessment or writ issued by any Governmental Authority. 
 “Liabilities” means, with respect to any Person, all liabilities owing by such Person of any nature, whether accrued,
absolute, contingent or otherwise, and whether due or to become due. 
 “Lien” means any mortgage, pledge,
claim, security interest, encumbrance, title defect, lien, charge or other restriction or limitation. 
 “Material
Adverse Effect” means any (a) event, occurrence, fact, condition, change or development that has had a material adverse effect on the operations, 

  

 4 

 
results of operations, financial condition, prospects, customer or supplier relations, employee relations, assets or Liabilities of each member of Beijing
Pypo Group, and their Subsidiaries, taken as a whole, or (b) material impairment of the ability of any member of Beijing Pypo Group or any of their Subsidiaries to perform their respective material obligations hereunder or under the other
Principal Agreements, as applicable. 
 “Memorandum and Articles” means the memorandum of association and the
articles of association of the Company, as amended and restated from time to time. 
 “Ordinary Shares” means
the Company’s ordinary shares, par value US$0.0001 per share. 
 “Permitted Liens” means (i) Liens
for taxes not yet delinquent or the validity of which are being contested and (ii) Liens incurred in the ordinary course of business, which (x) do not in the aggregate materially detract from the value of the assets that are subject to
such Liens and (y) were not incurred in connection with the borrowing of money. 
 “Person” means any
individual, corporation, partnership, limited partnership, proprietorship, association, limited liability company, firm, trust, estate or other enterprise or entity. 
 “Plan of Restructuring” means the Plan of Restructuring attached hereto as Schedule I, as amended from time to
time by mutual written consent of the Parties hereto. 
 “PRC” means the People’s Republic of China, but
solely for the purposes of this Agreement and the other Principal Agreements excluding Hong Kong, the Macau Special Administrative Region and Taiwan. 
 “Principal Agreements” means, collectively, this Agreement and the Shareholders and Sponsors Agreement (as defined below), the Indemnification Agreement (as defined below) and the Commitment and
Non-Compete Agreement (as defined below). 
 “Related Party” shall mean, with respect to any Person,
(a) any Affiliate of such Person, (b) each Person that serves as a director, officer, partner, executor, or trustee of such Person (or in any other similar capacity), and his/her family members, (c) any Person with respect to which
such Person serves as a general partner or trustee (or in any other similar capacity), (d) any Person that has direct or indirect beneficial ownership of voting securities or other voting interests representing at least ten percent
(10%) of the outstanding voting power or equity securities or other equity interests representing at least ten percent (10%) of the outstanding equity interests (a “Material Interest”) in such Person, (e) any Person
in which such Person holds a Material Interest, and (f) if such Person is an individual, any Person who is a family member of such Person. 
  

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 “Restructuring” means collectively, the transactions as described in the
Plan of Restructuring and any other transactions contemplated by the Parties hereto. 
 “RMB” means Remenbi,
the lawful currency of PRC. 
 “Subsidiary” means, with respect to any given Person, any Person that is not a
natural Person and that is Controlled by such given Person. 
 “Tax” means any national, provincial or local
income, sales and use, excise, franchise, real and personal property, gross receipt, capital stock, production, business and occupation, disability, employment, payroll, severance or withholding tax or any other type of tax, levy, assessment, custom
duty or charge imposed by any Governmental Authority, any interest and penalties (civil or criminal) related thereto or to the nonpayment thereof, and any loss or Liabilities incurred in connection with the determination, settlement or litigation of
any Liabilities arising therefrom. 
 “Tax Return” means any tax return, declaration, report, estimate, claim
for refund, claim for extension, information return, or statement relating to any Taxes, including any schedule or attachment thereto. 
 2. Purchase and
Sale of Shares. 
 2.1 Sale and Issuance of Ordinary Shares. Subject to the terms and conditions of this Agreement, at the Closing
(as defined herein below), the Investor agrees to subscribe for and purchase, and the Company agrees to issue and sell to the Investor, 90,000,000 Ordinary Shares of the Company, par value US$0.0001 per share, with the rights and privileges as set
forth in the Memorandum and Articles, at a purchase price of US$1.00 per share for an aggregate amount of consideration of US$90,000,000 (the “Purchase Price”), to be paid in accordance to Section 2.2(iii). 
 2.2 Closing. 
 (i) The purchase and
sale of the Ordinary Shares hereunder shall take place at such time and date, remotely or at such location to be mutually agreed to by the Parties (which time, date and place are designated as the “Closing”); 
 (ii) At the Closing, the Company shall deliver to the Investor (a) a copy of the updated Register of Members reflecting the issuance to the Investor
of the Ordinary Shares purchased by the Investor hereunder, and (b) a certificate or certificates representing the Ordinary Shares purchased by the Investor hereunder; and 
 (iii) At the Closing, the Investor shall deliver the Purchase Price by wire transfer of immediately available U.S. dollar funds to the bank account
designated in writing by the Company prior to the Closing (the “Company Account”). 
 2.3 Company Account. The
Company Account into which the Purchase Price is to be deposited at Closing shall be an interest bearing account with a reputable bank in Hong Kong as may be agreed upon by the Sponsors and the Investor. Upon the Closing, Kong Kam Yu, and Allan Liu
(or his successor appointed by the Investor) shall be named as the signatories under such Company Account and any withdrawal, disbursement or payment from, or any other transactions relating to, such Company Account shall require the 

  

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signature of both Kong Kam Yu and Allan Liu (or his successor appointed by the Investor). Allan Liu (or his successor appointed by the Investor) shall never
be removed as a signatory of the Company Account. 
 3. Representations and Warranties of the Sponsors and Beijing Pypo. Subject to such exceptions as
may be specifically set forth in the Disclosure Schedule which the Sponsors and Beijing Pypo shall deliver to the Investor promptly after the date hereof and in any event prior to the Closing (the “Disclosure Schedule”), each of the
Sponsors and Beijing Pypo, jointly and severally, represents and warrants to the Investor that the statements contained in this Section 3 are correct and complete as of the date of this Agreement, and on and as of the date of the
Closing, if not the same date as the date of this Agreement, with the same effect as if made on and as of the date of the Closing. 
 3.1
Organization, Good Standing and Qualification. Each member of Beijing Pypo Group is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation. Each member of Beijing Pypo Group has all
requisite legal and corporate power and authority to carry on its business as now conducted, and is duly qualified to transact business in each jurisdiction in which the failure to so qualify could have a Material Adverse Effect. 
 3.2 Capitalization and Voting Rights. Section 3.2 of the Disclosure Schedule sets forth the complete and accurate shareholding
structure of China Bright, Style Tech, Trend Focus, PDH(HK), each member of Beijing Pypo Group and such member’s Subsidiary(ies) (collectively, the “Affiliated Entities”), including but not limited to: (i) record and
beneficial owners of each of the Affiliated Entities, and (ii) share capital or registered capital of each of the Affiliated Entities. All share capital or registered capital of each of the Affiliated Entities has been duly and validly issued
(or subscribed for), is fully paid and non-assessable, free of Liens, encumbrance and any restrictions on transfer (except for any restrictions on transfer under applicable Laws). No share capital or registered capital of any Affiliated Entities was
issued or subscribed to in violation of the preemptive rights of any person, terms of any agreement or any Laws, by which each such Person at the time of issuance or subscription was bound. Except as set forth in Section 3.2 of the
Disclosure Schedule, (i) there are no resolutions pending to increase the share capital or registered capital of any Affiliated Entities; (ii) there are no outstanding options, warrants, proxy, agreements, pre-emptive rights or other
rights relating to the share capital or registered capital of any Affiliated Entities, other than as contemplated by the Principal Agreements; (iii) there are no outstanding Contracts or other agreements under which any Person purchases or
otherwise acquires, or has the right to purchase or otherwise acquire, any interest in the share capital or registered capital of any Affiliated Entities, other than the Principal Agreements; (iv) there are no dividends which have accrued or
been declared but are unpaid by any Affiliated Entities; and (v) there are no outstanding or authorized equity appreciation, phantom equity, equity plans or similar rights with respect to any Affiliated Entities. 
 3.3 Authorization. Each of the Sponsors and Beijing Pypo has full power and authority to enter into this Agreement, and the other Principal
Agreements to which it/he/she is a party. This Agreement and the other Principal Agreements to which any of the Sponsors or Beijing Pypo is a party, when executed and delivered by such Sponsors and/or Beijing Pypo, will constitute valid and legally
binding obligations of such Sponsors and/or 

  

 7 

 
Beijing Pypo, enforceable against it/him/her in accordance with their respective terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other Laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by Laws relating to the availability of specific performance, injunctive relief, or other equitable
remedies. 
 3.4 Tax Matters. 
 (i) The provisions for Taxes as shown on the balance sheet included in the Financial Statements (as defined in Section 3.6 below) are sufficient in all material respects for the payment of all accrued and unpaid applicable Taxes
of each member of Beijing Pypo Group as of the date of each such balance sheet, whether or not assessed or disputed as of the date of each such balance sheet. There have been no extraordinary examinations or audits of any Tax Returns or reports by
any applicable Governmental Authority. Each member of Beijing Pypo Group (A) has filed or caused to be filed on a timely basis all Tax Returns that are or were required to be filed under the applicable Laws; (B) other than unpaid Taxes
that are in contest with tax authorities by any member of Beijing Pypo Group in good faith or nonmaterial in amount, have paid, or made provision for the payment of, all Taxes that have become due, and have withheld and remitted to the appropriate
Governmental Authority all Taxes which it is obligated to withhold and remit from amounts owing to any employee, creditor, customer or third party; and (C) has not waived any statute of limitations with respect to Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency. 
 (ii) No member of Beijing Pypo Group, or, the shareholders of any member
of Beijing Pypo Group solely by virtue of its status as shareholder of any member of Beijing Pypo Group, has personal liability under local Law for the debts and claims of the relevant entity. There has been no communication from any tax authority
relating to or affecting the tax classification of any member of Beijing Pypo Group. 
 (iii) Each Tax Return referred to in paragraph
(i) above was properly prepared in compliance with applicable Law and was true, correct and complete in all material respects as of its respective date. None of such Tax Returns contains a statement that is false or misleading in any material
respect or omits any matter that is required to be included or without which the statement would be false or misleading in any material respect. No reporting position was taken on any such Tax Return which has not been disclosed to the appropriate
tax authority or in such Tax Return, as may be required by the applicable Law. All records relating to such Tax Returns or to the preparation thereof required by applicable Law to be maintained by applicable member of Beijing Pypo Group have been
duly maintained. 
 (iv) There are no material unresolved questions or claims concerning any Tax Liabilities of any member of Beijing Pypo
Group. There is no pending dispute with, or notice from, any taxing authority relating to any of the Tax Returns filed by any member of Beijing Pypo Group which, if determined adversely to such member, could result in the assertion by any taxing
authority of any valid deficiency in a material amount for Taxes, and to the knowledge of each of the Sponsors and the applicable member(s) of Beijing Pypo Group, there is no proposed Liability for a deficiency in any Tax to be imposed upon the
properties or assets of any member of Beijing Pypo Group. No member of Beijing Pypo 

  

 8 

 
Group has been the subject of any examination or investigation by any tax authority relating to the conduct of its business or the payment or withholding of
Taxes that has not been resolved or is currently the subject of any examination or investigation by any tax authority relating to the conduct of its business or the payment of withholding of Taxes. No member of the Beijing Pypo Group is responsible
for the Taxes of any other Person by reason of contract, successor liability or otherwise. 
 3.5 Constitutional Documents; Books and
Records. Except for amendments necessary to satisfy representations and warranties or conditions contained herein (the forms of which amendments have been approved by the Investor), the accurate and complete copies of the constitutional
documents of each member of Beijing Pypo Group have been provided to the Investor. Each member of Beijing Pypo Group maintains in all material respects its books of accounts and records in the usual, regular and ordinary manner, on a basis
consistent with prior practice, and which permits its Financial Statements (as defined herein below) to be prepared in accordance with the Hong Kong Financial Reporting Standards. 
 3.6 Financial Statements. Section 3.6 of the Disclosure Schedule sets forth, and the Company has delivered to the Investor,
(a) the audited consolidated statements of operations and cash flows of Beijing Pypo Group for the fiscal years ended December 31, 2004 and December 31, 2005 prepared in accordance with the Hong Kong Financial Reporting Standards,
(b) the audited consolidated balance sheets of Beijing Pypo Group as of December 31, 2004 and December 31, 2005 prepared in accordance with the Hong Kong Financial Reporting Standards, (c) the unaudited consolidated statements of
operations and cash flow of Beijing Pypo Group for the fiscal years ended March 31, 2006 and March 31, 2007, and the first five (5) months of fiscal year 2007 ended on August 31, 2007 (the “Statement Date”) and
(d) the unaudited consolidated balance sheets of Beijing Pypo Group as of March 31, 2006, March 31, 2007 and August 31, 2007, respectively (collectively, the “Financial Statements”). The Financial Statements
are (x) complete and correct in all material respects and present fairly the financial condition and position of Beijing Pypo Group as of their respective dates, in each case except as disclosed therein and except for the absence of notes,
(y) prepared in accordance with the Hong Kong Financial Reporting Standards applied on a consistent basis, and (z) audited and certified by a “big four” accounting firm or other independent certified public accountant acceptable
to the Investor. 
 3.7 Changes. Since the Statement Date, except as contemplated by this Agreement and except as set forth in
Section 3.7 of the Disclosure Schedule, there has not been: 
 (i) any change in the assets, Liabilities, financial condition or
operations of Beijing Pypo Group from that as reflected in the Financial Statements, other than changes in the ordinary course of business, or those changes which could not reasonably be expected to have a Material Adverse Effect; 
 (ii) any waiver by a member of Beijing Pypo Group of a valuable right of value or of a debt owed to it; 
  

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 (iii) any incurrence of or commitment to incur any indebtedness by a member of Beijing Pypo Group for
money borrowed, other than such indebtedness incurred in the ordinary course of business; 
 (iv) any resignation or termination of any Key
Employee; 
 (v) any satisfaction or discharge of any Lien or payment of any obligation by any member of Beijing Pypo Group, except in the
ordinary course of business and that is not material to the assets, properties, financial condition, operation or business of such entities as presently conducted; 
 (vi) any material change, amendment to or termination of a Material Contract (as defined below in Section 3.10(i)); 
 (vii) any change in any compensation arrangement or agreement with any key employee of any member of Beijing Pypo Group; 
 (viii) any sale, assignment, exclusive license or transfer of any Intellectual Property, other than in the ordinary course of business; 
 (ix) any Lien created by any member of the Beijing Pypo Group with respect to any of its properties or assets, except for Liens for taxes not yet due or payable; 
 (x) any loan or advance to, guarantee for the benefit of, or investment in, any Person (including but not limited to any of the employees, officers or
directors, or any members of their immediate families, of any member of Beijing Pypo Group) by a member of Beijing Pypo Group; 
 (xi) any
declaration, setting aside or payment or other distribution in respect of any Affiliated Entities’ capital shares, or any direct or indirect redemption, purchase or other acquisition of any of such shares by such Affiliated Entities other than
the repurchase of capital shares from employees, officers, directors or consultants pursuant to share restriction agreements approved by the Board of Directors of such Affiliated Entity;
 (xii) any material failure by a member of Beijing Pypo Group to conduct business in the ordinary course, consistent with such member’s past
practices; 
 (xiii) any damages, destruction or loss, whether or not covered by insurance, materially and adversely affecting the assets,
properties, financial condition, operation or business of any member of Beijing Pypo Group; 
 (xiv) receipt of notice that there has been a
loss of, or order cancellation by, any major customer of any member of Beijing Pypo Group; 
 (xv) any capital expenditures or commitments
made by any member of Beijing Pypo Group that aggregate in excess of US$250,000 or RMB equivalent of US$250,000; 
 (xvi) to the knowledge of
Sponsors and members of Beijing Pypo Group, any event or condition of any character which might have a Material Adverse Effect on the 

  

 10 

 
assets, properties, financial condition, operation or business of any member of Beijing Pypo Group, but excluding any of the foregoing resulting from general
economic conditions or from conditions that generally affect the industry of any member(s) of Beijing Pypo Group or any of their Subsidiaries other than changes that have a materially disproportionate effect on any member(s) of Beijing Pypo Group or
any of their Subsidiaries; or 
 (xvii) any agreement or commitment by any Affiliated Entity to do any of the things described in this
Section 3.7. 
 3.8 Litigation. 
 (i) There is no action, suit, proceeding, or investigation (including without limitation, any action, suit, proceeding, or investigation regarding the prior employment of any employees of the members of Beijing Pypo
Group, or such employees’ use during the course of employment of any information or techniques allegedly proprietary to any of their former employers) pending, and to the knowledge of the Sponsors and the members of Beijing Pypo Group,
threatened, against any Sponsors or any member of Beijing Pypo Group. Nor is any Sponsor or any member of Beijing Pypo Group aware of any basis for any of the foregoing. None of the Sponsor and the members of Beijing Pypo Group has initiated or
intends to initiate any court action, suit, proceeding or investigation against any Person. 
 (ii) To the knowledge of the Sponsors and the
members of Beijing Pypo Group, there is no action, suit, proceeding or investigation pending or threatened against any key employee or director of any member of Beijing Pypo Group in connection with their respective relationship with such entity.

 (iii) There is no judgment, decree, or order of any court or Governmental Authority in effect and binding on any Sponsors or any member of
Beijing Pypo Group or their respective assets or properties. 
 (iv) No Governmental Authority has at any time materially challenged or
questioned the legal right of any member of Beijing Pypo Group to conduct its business as presently being conducted. 
 (v) None of the
Sponsors and the members of Beijing Pypo Group has received any opinion or memorandum or advice from legal counsel to the effect that it/he is exposed, from a legal standpoint, to any Liability or disadvantage which may be material to the business
of any member of Beijing Pypo Group. 
 3.9 Liabilities. Except as set forth in Section 3.9 of the Disclosure Schedule or
arising under the commitments as set forth in Section 3.10 of the Disclosure Schedule, no member of Beijing Pypo Group has any Liabilities of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become
due, except for (i) Liabilities set forth in the Financial Statements, (ii) trade or business Liabilities incurred in the ordinary course of business, and (iii) other Liabilities that do not exceed US$250,000 or RMB equivalent of
US$250,000 in the aggregate. 
  

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 3.10 Commitments. 
 (i) Section 3.10(i) of the Disclosure Schedule contains a complete and accurate list of all Contracts to which any member of Beijing Pypo Group is a party or to which any member of Beijing Pypo Group or
any of their respective properties is subject or by which any such member or property is bound, including: (A) any Contract involving obligations (contingent or otherwise) of or payments to any member of Beijing Pypo Group in excess of
US$250,000 or RMB equivalent of US$250,000 or having an effective term of more than one (1) year, (B) the license or transfer of Intellectual Property or other proprietary rights to or from any member of Beijing Pypo Group, (C) any
Contract that limits or restricts the ability of any member of Beijing Pypo Group to compete or otherwise to conduct its business in any manner or location, (D) any joint venture, partnership, alliance or similar Contracts, (E) any asset
purchase agreement, share purchase agreement or other Contract for acquisition or divestiture of any assets (including, without limitation, any Intellectual Property) by or of any member of Beijing Pypo Group for aggregate consideration in excess of
US$250,000 or RMB equivalent of US$250,000, (F) any Contract that grants a power of attorney, agency or similar authority to a Person other than power delegated to an officer of a member of Beijing Pypo Group for the performance of its duties
in the ordinary course of business, (G) any Contract that contains a right of first refusal, and (H) any other Contract that is material and was not made in the ordinary course of business (collectively, the “Material
Contracts”). 
 (ii) Except as set forth in Section 3.10(ii) of the Disclosure Schedule, there are no Contracts
containing covenants that in any material way purport to restrict the business activity of any member of Beijing Pypo Group, or limit in any material respect the freedom of any member of Beijing Pypo Group to engage in any line of business that each
of them is currently engaged in, or to compete in any material respect with any entity, or to obligate in any material respect any member of Beijing Pypo Group to share, license or develop any product or technology. 
 (iii) All of the Material Contracts are valid, subsisting, in full force and effect and binding upon the respective parties thereto, the complete and
accurate copies of which have been delivered to the Investor. 
 (iv) Each member of Beijing Pypo Group has in all material respects
satisfied or provided for all of their Liabilities and obligations under the Material Contracts requiring performance prior to the date hereof, and is not in default in any material respect under any Material Contract. Nor does any condition exist
that with notice or lapse of time or both would constitute a default thereunder. None of the Sponsors and members of Beijing Pypo Group is aware of any material default thereunder by any other party(ies) to any Material Contract or any existing
condition that with notice or lapse of time or both would constitute a material default, or give any Person the right to declare a material default or exercise any remedy thereunder, or to accelerate the maturity or performance of, or to cancel,
terminate, or modify, a Material Contract. 
 (v) None of the members of Beijing Pypo Group has given to or received from any Person any
notice or other communication (whether oral or written) regarding any actual, alleged, possible, or potential material violation or material breach of, or material default under, any Material Contract. 
  

 12 

 (vi) None of the Material Contracts does or will (A) result in a violation or breach of any
provision of the respective constitutional documents of any member of Beijing Pypo Group, or (B) result in a material breach of, or constitute a material default under, or result in the creation or imposition of, any Lien to which any member of
Beijing Pypo Group or any of their properties is subject, or (C) result in a breach of any applicable Laws. 
 3.11 Compliance with
Laws. 
 (i) Except as set forth in Section 3.11 of the Disclosure Schedule, each member of Beijing Pypo Group is in
compliance with all Laws or regulations that are applicable to it or to the conduct or operation of its business or the ownership or use of any of its assets or properties, including without limitation, any PRC governmental orders arising under any
applicable PRC Laws that may require the registration or licensing of any Intellectual Property but excluding any third party claims, except for such non-compliance that, individually or in the aggregate, would not result in any Material Adverse
Effect. 
 (ii) All approvals and authorizations from and filings and registrations with the relevant Governmental Authority required in
respect of Beijing Pypo Group, including but not limited to the registrations with the Ministry of Commerce (or any predecessors), the Ministry of Information Industry, the State Administration of Industry and Commerce (“SAIC”), the
State Administration of Foreign Exchange (“SAFE”), any tax bureau, customs authorities, product registration authorities, and the local counterpart of each of the aforementioned PRC Governmental Authorities, as applicable, have been
duly completed in accordance with all applicable Laws. 
 (iii) No event has occurred and no circumstance exists that (with or without notice
or lapse of time) (a) may constitute or result in a violation by any member of Beijing Pypo Group of, or a failure on the part of any member of Beijing Pypo Group to comply with, any Law or regulation, or (b) may give rise to any
obligation on the part of any member of Beijing Pypo Group to undertake, or to bear all or any portion of the cost of, any remedial action of any nature, except for such violations or failures by members of Beijing Pypo Group that, individually or
in the aggregate, could not result in any Material Adverse Effect. 
 (iv) No member of Beijing Pypo Group has received any written notice
from any Governmental Authority regarding (a) any actual, alleged, possible, or potential material violation of, or material failure to comply with, any Law, or (b) any actual, alleged, possible, or potential material obligation on the
part of any member of Beijing Pypo Group to undertake, or to bear all or any portion of the cost of, any remedial action of any nature. 
 (v) Each member of Beijing Pypo Group has obtained all certificates, approvals, permits, licenses, registration receipts and any similar authority necessary under PRC Laws to conduct foreign exchange transactions (collectively, the
“Foreign Exchange Authorizations”) as now being conducted by it, and believes that it can obtain, without undue burden or expense, any such Foreign Exchange Authorizations for the conduct of foreign exchange transactions as
presently planned to be conducted. All existing Foreign Exchange Authorizations held by each member of Beijing Pypo Group are valid and none of the members of Beijing Pypo Group is in default under any of such Foreign Exchange 

  

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Authorizations. None of the members of Beijing Pypo Group has received any oral or written inquiries, notifications, orders or any other form of official
correspondence from SAFE or any of its local branches with respect to any actual or alleged non-compliance with Circular 75 issued by SAFE on October 21, 2005 (“Circular 75”). 
 (vi) The transactions as contemplated under the Principal Agreements, and the business of each member of Beijing Pypo Group as now conducted and as
presently planned to be conducted (including any business proposed to be conducted by entities that are not currently existing or that are not currently members of Beijing Pypo Group as of the Closing) are in compliance with all Laws and regulations
that may be applicable, including without limitation all Laws of the PRC with respect to mergers, acquisitions, foreign investment and foreign exchange transactions. 
 3.12 Title; Liens; Permits. 
 (i) The members of Beijing Pypo Group have good and marketable title to
all the tangible properties and assets reflected in their books and records, whether real, personal, or mixed, purported to be owned by Beijing Pypo Group, free and clear of any Liens, other than Permitted Liens. With respect to the tangible
property and assets it leases, each member of Beijing Pypo Group is in compliance in all material respects with such leases and holds a valid leasehold interest free of any Liens, other than Permitted Liens. Each member of Beijing Pypo Group owns or
leases all tangible properties and assets necessary to conduct in all material respects their respective business and operations as presently conducted. 
 (ii) Except as set forth in Section 3.12 of the Disclosure Schedule, each member of Beijing Pypo Group has all material franchises, authorizations, approvals, permits, certificates and licenses (the
“Permits”) necessary for its respective business and operations as now conducted or planned to be conducted pursuant to the Principal Agreements, its business plan and current budget. None of the members of Beijing Pypo Group is in
default in any material respect under any such Permits. 
 (iii) Except as set forth in Section 3.12 of the Disclosure Schedule,
no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any Governmental Authority on the part of Beijing Pypo or the Sponsors is required in connection with the valid execution and
delivery of this Agreement and the other Principal Agreements. 
 3.13 Subsidiaries. Except as set forth in Section 3.2 of
the Disclosure Schedule, no Affiliated Entity owns or Controls, directly or indirectly, any interest in any other Person or is a participant in any joint venture, partnership or similar arrangement. 
 3.14 Compliance with Other Instruments. None of the members of Beijing Pypo Group is in violation, breach or default of its constitutional
documents (which include, as applicable, any articles of incorporation, articles of association, by-laws, joint venture contracts and similar documents), except for such violation, breach or default that could not result in a Material Adverse
Effect. The execution, delivery and performance by the applicable members of Beijing Pypo Group of and compliance with each of the Principal Agreements, and the consummation of the transactions contemplated hereby and thereby, 

  

 14 

 
will not be in conflict with or constitute, with or without the passage of time or the giving of notice or both, a violation, breach or default under
(a) the constitutional documents of any member of Beijing Pypo Group, (b) any Material Contract, (c) any judgment, order, writ or decree or (d) to the knowledge of the Sponsors and Beijing Pypo, any applicable Law. 
 3.15 Registration Rights. None of the members of Beijing Pypo Group has granted or agreed to grant any Person any registration rights (including
piggyback registration rights) with respect to any of their securities. 
 3.16 Related Party Transactions. Except as
contemplated under the Principal Agreements or as set forth in Section 3.16 of the Disclosure Schedule, no Related Party of Beijing Pypo or other members of Beijing Pypo Group, has any material agreement, understanding, proposed
transaction with, or is materially indebted to, any member of Beijing Pypo Group or any Sponsors; nor is any member of Beijing Pypo Group or any Sponsor materially indebted (or committed to make loans or extend or guarantee credit) to any of its
Related Parties (other than for accrued salaries, reimbursable expenses or other standard employee benefits). No Related Party of Beijing Pypo or other members of Beijing Pypo Group has any material direct or indirect ownership interest in any firm
or corporation with which a member of Beijing Pypo Group is affiliated or with which a member of Beijing Pypo Group has a business relationship, or any firm or corporation that competes with a member of Beijing Pypo Group (except that Related
Parties may own less than 1% of the stock of publicly traded companies that engage in the foregoing). No Related Party of Beijing Pypo or other members of Beijing Pypo Group has, either directly or indirectly, a material interest in: (a) any
Person which purchases from or sells, licenses or furnishes to a member of Beijing Pypo Group any goods, property, intellectual or other property rights or services; or (b) any Contract to which a member of Beijing Pypo Group is a party or by
which it may be bound or affected. For purposes of this Section 3.16 only, the term “material” or “materially” shall mean an obligation or interest in excess of US$50,000 or RMB equivalent of US$50,000. 
 3.17 Environmental and Safety Laws. 
 (i) No member of Beijing Pypo Group is in violation of any applicable Law or regulation relating to the environment or occupational health and safety and no material expenditures are or will be required in order to comply with any such
existing Law or regulation. No member of Beijing Pypo Group (A) owns or operates any real property contaminated with any substance that is subject to any Environmental Laws, (B) is liable for any off-site disposal or contamination pursuant
to any Environmental Laws, or (C) is subject to any claim relating to any Environmental Laws and there are no claims, proceedings, investigations or actions by any Governmental Authority or other Person pending or, to the knowledge of the
Sponsors and the members of Beijing Pypo Group, threatened in writing in connection with the operations of Beijing Pypo Group under any applicable Environmental Laws. 
 (ii) To the knowledge of the Sponsors and the members of Beijing Pypo Group, no member of Beijing Pypo Group is in violation in any material respect with any applicable Law relating to the environment or occupational
health and safety that could have a material adverse effect on its employees, and no material expenditures are or will be required in order to comply with any such existing Law. 
  

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 (iii) Each member of Beijing Pypo Group has obtained and holds all material Permits required under
applicable Environmental Laws, and is in compliance with all terms and conditions of such Permits. 
 (iv) All environmental investigations,
studies, tests, reviews or other analyses conducted by, on behalf of, or which are in the possession or control of the members of Beijing Pypo Group with respect to any Real Property have been delivered or made available to the Investor. 

3.18 Intellectual Property Rights. 
 (i) The members of Beijing Pypo Group own or otherwise have the right or license to use all Intellectual Property without, to the knowledge of the Sponsors and members of Beijing Pypo Group, any violation or infringement of the rights of
others, free and clear of all Liens other than Permitted Liens. Section 3.18(i) of the Disclosure Schedule contains a complete and accurate list of all Intellectual Property owned, licensed to or used by the members of Beijing Pypo
Group, whether registered or not, and a complete and accurate list of all licenses granted by any member of Beijing Pypo Group to any Person with respect to any Intellectual Property. There is no claim, proceeding or litigation pending or, to the
knowledge of the Sponsors and members of Beijing Pypo Group, threatened against any member of Beijing Pypo Group, contesting the right to use its Intellectual Property, asserting the misuse thereof, or asserting the infringement or other violation
of any Intellectual Property of any third party. All material know-how and material inventions conceived by employees of members of Beijing Pypo Group and related to the businesses of Beijing Pypo Group are “works made for hire,” and all
right, title, and interest therein, including any applications therefor, have been duly transferred and assigned to Beijing Pypo Group. 
 (ii) There are no pending proceedings or claims in which any member of Beijing Pypo Group alleges that any Person is infringing upon, or otherwise violating, its Intellectual Property rights. Nor have any such proceedings or claims been
served, instituted or asserted by any member of Beijing Pypo Group. 
 (iii) None of the key employees of any member of Beijing Pypo Group is
obligated under any Contract, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with the use of his or her best efforts to promote the interests of Beijing Pypo Group or that would conflict with
the business of Beijing Pypo Group as presently conducted. Except for inventions that have been validly and properly assigned or licensed to Beijing Pypo Group, no inventions of any employees of Beijing Pypo Group made prior to their respective
employment by Beijing Pypo Group have been utilized during the course of or are necessary for the business operations of any member of Beijing Pypo Group. 
 (iv) Each member of Beijing Pypo Group has taken all security measures that in the judgment of Beijing Pypo Group are commercially prudent in order to protect the secrecy, confidentiality, and value of their
respective material Intellectual Property. 
  

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 3.19 Real Property. 
 (i) Each member of Beijing Pypo Group owns or has legal or equitable title to or other right or interest in any real property used in its business (the “Real Property”). Each member of Beijing Pypo
Group is the sole legal owner of all land use rights (if any) with respect to its real estate (the “Land Grants”) and all improvements necessary for the current use and operation of its business. Each member of Beijing Pypo Group
has all authorizations, approvals, waivers or permits of applicable Governmental Authority(ies) (the “Governmental Approvals”) necessary for the current use and operation of its Real Property, and each member of Beijing Pypo Group
has fully complied with all material conditions of such Governmental Approvals applicable to it. No member of Beijing Pypo Group has received any notice of and, to the knowledge of the Sponsors and members of Beijing Pypo Group, no member of Beijing
Pypo Group is or has been threatened with, any material default or violation, or event that with the lapse of time or giving of notice or both would become a material default or violation, in the due observance of any Governmental Approval. Except
as disclosed in Section 3.19(i) of the Disclosure Schedule, (i) any and all Land Grant premiums required under applicable Laws and the relevant Land Grant contracts securing the land use rights, and (ii) all associated fees and
taxes have been or will be fully paid. No member of Beijing Pypo Group has received any notice of and, to the knowledge of the Sponsors and members of Beijing Pypo Group, no member of Beijing Pypo Group is in or has been threatened with, any default
or breach of, or challenge to the validity of, any Land Grants. 
 (ii) All water, sewer, gas, electric, telephone, and drainage facilities
and all other utilities required by applicable Law necessary for the operation of the business of Beijing Pypo Group (A) are installed across public property or under valid easements to the boundary lines of the Real Property and (B) are
connected pursuant to valid Governmental Approvals. 
 (iii) There does not exist any actual or, to the knowledge of the Sponsors and members
of Beijing Pypo Group, threatened condemnation or eminent domain proceedings that affect or might affect any Real Property or any part thereof, and no member of Beijing Pypo Group has, within the past three (3) years, received any notice, oral
or written, of the intention of any Governmental Authority or other Person to take or use all or any part thereof. 
 (iv) No member of
Beijing Pypo Group owns, holds, is obligated under or is a party to, any option, right of first refusal or other contractual right to purchase, acquire, sell, assign or dispose of any Real Property or any portion thereof or interest therein.

 3.20 Entire Business. There are no material facilities, services, assets or properties shared with any other entity that is not a
member of Beijing Pypo Group, which are used in connection with the business of Beijing Pypo Group. 
 3.21 Labor Agreements and Actions.

 (i) Except as set forth in Section 3.21 of the Disclosure Schedule, and except as required by Law, none of the members of
Beijing Pypo Group is a party to or bound by any currently effective employment contract, deferred compensation agreement, bonus plan, incentive plan, profit sharing plan, retirement agreement or other employee compensation agreement. 
  

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 (ii) The employment of each employee of the members of Beijing Pypo Group is terminable at will. Neither
the Sponsors nor the members of Beijing Pypo Group are aware that any Key Employee, or that any group of employees of the members of Beijing Pypo Group, intends to terminate their employment with the applicable member of Beijing Pypo Group; nor does
any member of Beijing Pypo Group have a present intention to terminate the employment of any of the foregoing. 
 (iii) Each member of
Beijing Pypo Group has complied in all material respects with all applicable Laws related to employment, and to the knowledge of the Sponsors and members of Beijing Pypo Group, none of the members of Beijing Pypo Group has any union organization
activities, threatened or actual strikes or work stoppages or material grievances. None of the members of Beijing Pypo Group is bound by or subject to (and none of their assets or properties is bound by or subject to) any written or oral, express or
implied, contract, commitment or arrangement with any labor union. Each member of Beijing Pypo Group maintains, and has fully funded, any pension plan and any other labor-related plans that it is required by Law or by Contract to maintain. Each
member of Beijing Pypo Group is in compliance with any Law relating to its provision of any form of social insurance (“Social Insurance”), and has paid, or made provision for the payment of, all Social Insurance contributions
required under applicable Law. 
 (iv) Each key employee of the members of Beijing Pypo Group is currently devoting substantially all of his
or her business time to the conduct of the business of the applicable member of Beijing Pypo Group. No key employee of any member of Beijing Pypo Group is, to the knowledge of the Sponsors and members of Beijing Pypo, planning to work less than full
time at such member of Beijing Pypo Group in the future. No key employee is currently working or, to the knowledge of the Sponsors and members of Beijing Pypo, plans to work for any other Person that competes with any member of Beijing Pypo Group,
whether or not such key employee is or will be compensated by such Person. 
 3.22 Insurance. Section 3.22 of the
Disclosure Schedule accurately summarizes all of the insurance policies or programs of each member of Beijing Pypo Group that are in effect, and indicates the amount and type of coverage. These policies insure the members of Beijing Pypo Group
against such losses and risks and in such amounts as are customary in the business in which each such member is engaged. All such policies are in full force and effect and all premiums due thereon have been paid. All such insurance policies are
underwritten by financially sound and reputable insurers, and are sufficient to satisfy all applicable Laws. Each member of Beijing Pypo Group has complied in all material respects with the terms and provisions of such policies. All such policies
will remain in full force and effect and will not in any way be affected by, or terminate or lapse by reason of any of the transactions contemplated by the Principal Agreements. 
 3.23 Business Plan and Budget. A current business plan and budget of each member of Beijing Pypo Group for the twelve (12) months following
the Closing has been delivered to the Investor. Such business plan and budget was prepared in good faith based upon assumptions and projections which are reasonable and not materially misleading. 
  

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 3.24 Employee Intellectual Property and Confidentiality Agreement. Each employee of each member of
Beijing Pypo Group has entered into an Intellectual Property and Confidentiality Agreement, substantially similar in all material respects to the form set forth in Section 3.24 of the Disclosure Schedule. 
 3.25 Broker. Other than the agreement with NM Rothschild & Sons (Hong Kong) Limited, none of the Sponsors and the members of
Beijing Pypo Group have any Contract with any financial advisor, broker, finder or similar agent with respect to the transactions contemplated by this Agreement or by any of the other Principal Agreements. 
 3.26 Restructuring. Immediately prior to the Closing, the Restructuring has been duly consummated in accordance with the Plan of Restructuring and
to the Investor’s satisfaction, and the consummation is in compliance with all Laws that may be applicable, including without limitation all Laws of the PRC with respect to mergers, acquisitions, foreign investment and foreign exchange
transactions. 
 3.27 Disclosure. No representation or warranty of any member of Beijing Pypo Group contained in this Agreement, the
other Principal Agreements, or any certificate furnished or to be furnished to the Investor at the Closing contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein
or therein not misleading in light of the circumstances under which they were made. Except as set forth in this Agreement or the Disclosure Schedule, there is no fact that Beijing Pypo and the Sponsors have not disclosed to the Investor in writing
and of which any of its officers, directors or executive employees is aware and that has had or would reasonably be expected to have a Material Adverse Effect. 
 4. Representations and Warranties of the Investor. The Investor hereby represents and warrants to the Company, Beijing Pypo and the Sponsors that: 
 4.1 Status. The Investor is an entity duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation. 
 4.2 Authorization. The Investor has full power and authority to enter into this Agreement and each of the other Principal Agreements to which it
is a party, and this Agreement and each of the other Principal Agreements to which it is a party, when executed and delivered by the Investor, will constitute valid and legally binding obligations of the Investor, enforceable against it in
accordance with their respective terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other Laws of general application affecting enforcement of creditors’ rights generally and (ii) as
limited by Laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. 
 4.3 Purchase for
Own Account. The Ordinary Shares purchased hereunder (the “Purchased Securities”) to be received by the Investor, if any, will be acquired for investment purposes for the Investor’s own account, not as a nominee or agent,
and not with a view to the resale or distribution of any part thereof, and the Investor does not have any present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, the Investor
further represents that it has not been organized for the purpose of acquiring the Purchased Securities, and it does not have any Contract with any Person to, directly or indirectly, sell, transfer or grant participations, with respect to any of the
Purchased Securities and has not solicited any Person for such purpose. 
  

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 4.4 No Public Market. The Investor understands and acknowledges that the offering of the Purchased
Securities will not be registered or qualified under the applicable securities Laws on the grounds that the offering and sale of the Purchased Securities hereunder is exempt from registration or qualification, and that the Company’s reliance
upon these exemptions is predicated upon the Investor’s representations in this Agreement. The Investor further understands that no public market now exists for any of the securities issued by the Company. 
 5. Representations and Warranties of the Company. The Company hereby represents and warrants to the Investor that: 
 5.1 Organization, Good Standing and Qualification. The Company is duly incorporated, validly existing and in good standing under the Laws of the
Cayman Islands. The Company has all requisite legal and corporate power and authority to carry on their business as now conducted, and is duly qualified to transact business in each jurisdiction in which the failure to so qualify could have a
Material Adverse Effect. 
 5.2 Capitalization and Voting Rights. Immediately before the Closing, the authorized capital of the
Company shall consist of: 
 (i) 1,000,000,000 Ordinary Shares, par value US$0.0001 per share, of which (A) 91,350,000 shares was issued
to China Bright and 91,350,000 shares was issued to Style Tech each in accordance with the Plan of Restructuring; (B) 90,000,000 shares will be issued to the Investor at the Closing. The rights, privileges and preferences of Ordinary Shares are
as stated in the Memorandum and Articles. 
 (ii) Except as set forth above and except for certain rights provided in the Principal
Agreement, there are no outstanding options, securities, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or shareholders agreements, or agreements of any kind for the purchase or acquisition from the
Company of any of its equity securities. Except for certain rights provided in the Principal Agreements, the Company is not a party or subject to any agreement that affects or relates to the voting or giving of written consents with respect
to any security of the Company. 
 5.3 Authorization. The Company has all requisite legal and corporate power, and has taken all
necessary corporate action on the part of the Company, its officers, directors and shareholders for the authorization, execution and delivery of this Agreement, and the other Principal Agreements; and the performance of all obligations of the
Company hereunder and thereunder, and the authorization, issuance (or reservation for issuance), sale and delivery of the Ordinary Shares being sold hereunder, has been taken or will be taken prior to the Closing. This Agreement, and each of the
other Principal Agreements to which the Company is party, when executed and delivered by the Company, will constitute the valid and legally binding obligation of the Company, enforceable against the Company in accordance with their respective terms,
except (A) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other Laws of general application affecting enforcement of creditors’ rights generally, and (B) as limited by Laws relating to the 

  

 20 

 
availability of specific performance, injunctive relief, or other equitable remedies. The issuance of any Purchased Securities is not subject to any
preemptive rights or rights of first refusal, or if any such preemptive rights or rights of first refusal exist, waiver of such rights has been obtained from the holders thereof. 
 5.4 Valid Issuance of Shares. The Purchased Securities, when issued, sold and delivered in accordance with the terms of this Agreement for the
consideration expressed herein, will be duly and validly issued, fully paid and non-assessable, free from any Liens and unless stated herein otherwise will be free of restrictions on transfer (except for any restrictions on transfer under applicable
securities Laws). 
 5.5 Governmental Consents. No consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any Governmental Authority on the part of the Company is required in connection with the offer, sale, issuance or reservation for issuance of the Purchased Securities, the valid execution and delivery of this
Agreement and the other Principal Agreements, or the consummation of the transactions contemplated under the Principal Agreements. 
 5.6
Offering. The offer, sale and issuance of the Purchased Securities as contemplated by this Agreement, is exempt from the qualification, registration and prospectus delivery requirements under any applicable securities Laws. 
 6. Conditions of the Investor’s Obligations at Closing. Unless otherwise waived in writing by the Investor, the obligations of the Investor under
Section 2 of this Agreement, are subject to the fulfillment on or before the Closing of each of the following conditions: 
 6.1 Representations and Warranties. Except as set forth in the Disclosure Schedule, the representations and warranties of the Sponsors and Beijing Pypo contained in Section 3 and the representations and warranties of the
Company contained in Section 5 shall be true and correct in all material respects when made, and shall be true and correct in all material respects on and as of the Closing (if not the same date as the date hereof) with the same effect
as though such representations and warranties had been made on and as of the date of such Closing, except in either case for those representations and warranties (a) that already contain any materiality qualification, which representations and
warranties, to the extent already so qualified, shall instead be true and correct in all respects as so qualified as of such respective dates and (b) that address matters only as of a particular date, which representations will have been true
and correct in all material respects (subject to clause (a) above) as of such particular date. 
 6.2 Performance. Each of the
Company, the Sponsors and Beijing Pypo shall have performed and complied in all material respects with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the
Closing. 
 6.3 Authorizations. Each of the Company, the Sponsors and Beijing Pypo shall have obtained all authorizations, approvals,
waivers or permits of, or registration, qualification, designation, declaration or filing with any Person or any Governmental Authority necessary for the consummation of all of the transactions contemplated by the Principal Agreements, including
without limitation any authorizations, approvals, waivers 

  

 21 

 
or permits that are required in connection with the lawful issuance of the Purchased Securities pursuant to this Agreement, and all such authorizations,
approvals, waivers and permits shall be effective as of the Closing. 
 6.4 Closing Certificates. 
 (i) The chief executive officer of the Company shall have executed and delivered to the Investor at the Closing a certificate (a) stating that, with
respect to the Company only, the conditions specified in Sections 6.1, 6.2, 6.3, 6.5, 6.6, and 6.7 hereto have been fulfilled, and (b) attaching thereto (A) a complete copy of Memorandum and
Articles as then in effect, (B) copies of all resolutions approved by the Company’s shareholders and board of directors related to the Restructuring and the transactions contemplated under the Principal Agreements, and (C) good
standing certificates with respect to the Company from the applicable authority(ies) in the Cayman Islands. 
 (ii) Wan shall have executed
and delivered to the Investor at the Closing a certificate (a) stating that, with respect to the Sponsors and Beijing Pypo, the conditions specified in Sections 6.1, 6.2, 6.3, 6.5, 6.7 and 6.8 hereto
have been fulfilled, and (b) attaching thereto (A) the constitutional documents of each member of Beijing Pypo Group then in effect, (B) copies of all resolutions approved by Beijing Pypo’s shareholders and board of directors
related to the Restructuring and the transactions contemplated under the Principal Agreements, and (C) good standing certificates with respect to each member of Beijing Pypo Group from the applicable authority(ies) in the jurisdiction of its
incorporation. 
 6.5 Proceedings and Documents. All corporate and other proceedings of the Company and the Affiliated Entities in
connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to the Investor, and the Investor shall have received all such counterpart original or other
copies of such documents as it may reasonably request. 
 6.6 Memorandum and Articles. The Memorandum and Articles of the Company, in
the forms attached hereto as Exhibit A-1 and Exhibit A-2, respectively, each as may be amended from time to time as requested by the Investor or as may be approved by the Investor, shall have been duly adopted by all necessary action
of the Company and shall have been duly filed with the Registrar of Companies of the Cayman Islands, and such adoption shall become effective prior to the Closing with no alternation or amendment as of the Closing. 
 6.7 Restructuring. The Restructuring has been duly consummated in accordance with the Plan of Restructuring and to the satisfaction of the
Investor, and the consummation is in compliance with all Laws that may be applicable, including without limitation all Laws of the PRC with respect to mergers, acquisitions, foreign investment and foreign exchange transactions. 
 6.8 Articles of Association of Beijing Pypo. The Articles of Association of Beijing Pypo shall have been amended and restated by all
necessary action of Beijing Pypo reasonably satisfactory in form and substance to the Investor to remove all provisions therein inconsistent with the terms of the Principal Agreements. Such amendment and restatement shall have been duly filed with
SAIC, and shall become effective upon the Closing with no other alternation or amendment as of the Closing. 
  

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 6.9 Opinions of Counsel. The Investor shall have received to its sole satisfaction: 
 (i) from the special People’s Republic of China counsel for the Company, an opinion, dated as of the Closing, in the form satisfactory to the
Investor; 
 (ii) from the special Cayman Islands counsel for the Company, an opinion, dated as of the Closing, in the form satisfactory to
the Investor; and 
 (iii) from the special Hong Kong counsel for the Company, an opinion, dated as of the Closing, in the form satisfactory
to the Investor. 
 6.10 Investment Committee Approval. The Investor’s investment committee shall have approved the execution of
the Principal Agreements and the Closing. 
 6.11 Commitment and Non-Competition. Each of the Sponsors and the Company shall have
executed and delivered a Commitment and Non-Compete Agreement in the form attached hereto as Exhibit B (the “Commitment and Non-Compete Agreement”), as may be amended from time to time as requested by the Investor or as may
be approved by the Investor. 
 6.12 Shareholders and Sponsors Agreement. The applicable Parties shall have executed and
delivered a certain Shareholders and Sponsors Agreement to the Investor in the form attached hereto as Exhibit C (the “Shareholders and Sponsors Agreement”), as may be amended from time to time as requested by the Investor or
as may be approved by the Investor. 
 6.13 Investor Director. Upon Closing, the Investor shall have the right to nominate, at
any time and from time to time, individuals to occupy one of the positions on the board of directors of each of the Company, PDH(HK) and Beijing Pypo (the “Investor Director”). Each of the Company, PDH(HK) and Beijing Pypo shall
indemnify the Investor Director to the maximum extent permitted by applicable Laws and deliver to the Investor a copy of the indemnification agreement duly executed by it in the form attached hereto as Exhibit D (the “Indemnification
Agreement”), as may be amended from time to time as requested by the Investor or as may be approved by the Investor. 
 6.14 No
Litigation. There is no action, suit, proceeding or investigation pending or threatened against any member of Beijing Pypo Group or Sponsors or any of the property of any of the foregoing that could reasonably be expected to have a
Material Adverse Effect. 
 6.15 Disclosure Schedule. Sponsors and Beijing Pypo shall have provided an accurate and complete
Disclosure Schedule; and the Investor is satisfied, in its sole discretion, with its review of the Disclosure Schedule. Upon the satisfactory review and approval by the Investor, such Disclosure Schedule shall be attached and incorporated as a part
of this Agreement. 
  

 23 

 7. Conditions of the Company’s, the Sponsors’ and Beijing Pypo’s Obligations at Closing. The
obligations of the Company, the Sponsors and Beijing Pypo as of the Closing under this Agreement, unless otherwise waived in writing by the Company, the Sponsors or Beijing Pypo, as the case may be, are subject to the condition that the
representations and warranties of the Investor contained in Section 4 shall be true and correct in all material respects when made, and shall be true and correct in all material respects on and as of the Closing with the same effect as
though such representations and warranties had been made on and as of the date of such Closing. 
 8. Covenants and Agreements. 
 8.1 Audited Financial Statements. As soon as practicable following the Closing, but in any event no later than four (4) months after the
Closing, Beijing Pypo shall submit to the Investor at Beijing Pypo’s expense (i) an audited consolidated financial statements of Beijing Pypo Group for the fiscal years ended March 31, 2006 and March 31, 2007, and (ii) an
unaudited consolidated management accounts of Beijing Pypo Group for the six-month period ended September 30, 2007, each (x) prepared in accordance with the Hong Kong Financial Reporting Standards applied on a consistent basis, and
(y) audited and certified by a “big four” accounting firm or other independent certified public accountant acceptable to the Investor. 
 8.2 Conduct of Business by Beijing Pypo Group. Except with the prior written consent of the Investor, and except as otherwise contemplated herein or required by Law, during the period from the date hereof to
the date of the Closing, Beijing Pypo agrees to observe, and to cause all the other members of Beijing Pypo Group to observe, the following covenants: 
 (i) Affirmative Covenants. Each member of Beijing Pypo Group shall: 
 (A) use reasonable
efforts to preserve intact its business organization and keep available the services of present employees, in each case in accordance with past practice, it being understood that the voluntary termination of an employee or termination of employees
with poor performance ratings shall not constitute a violation of this covenant; 
 (B) comply in all material respects with
all Laws applicable to it or to the conduct of its business and, in the ordinary course consistent with past practice, perform and comply with all Contracts, commitments and obligations by which it is bound; 
 (C) duly and timely file (giving effect to any permitted extensions) all Tax Returns or reports required to be filed with taxing
authorities and promptly pay all Taxes, assessments and governmental charges levied or assessed upon them or any of their properties (unless contesting the same in good faith and adequate provision has been made therefor); 
 (D) keep in effect casualty, public liability, worker’s compensation and other insurance policies in coverage amounts not less than
those in effect at the date of this Agreement; 
  

 24 

 (E) in the ordinary course consistent with past practice, preserve, advertise, promote
and market its business, keep its properties intact, maintain good commercial working relationships with its customers, preserve its goodwill, and maintain all physical properties in good operating condition; 
 (F) in the ordinary course consistent with past practice, preserve and protect its Intellectual Property; and 
 (G) operate its business solely in the ordinary course consistent with past practice. 
 (ii) Negative Covenants. None of the members of Beijing Pypo Group shall: 
 (A) sell, transfer, mortgage, pledge or create or permit to be created any Lien on, any of its assets, other than sales or transfers in
the ordinary course of business and Permitted Liens; 
 (B) (x) incur any obligation or Liabilities other than (1) in the
ordinary course of business or (2) for reasonable Transaction Expenses (as defined in Section 11.8 below), (y) incur any indebtedness for borrowed money, or (z) enter into any contracts or commitments involving payments by
any member of Beijing Pypo Group of US$250,000 or RMB equivalent of US$250,000 or more, other than purchase orders or commitments for inventory, materials and supplies in the ordinary course of business; 
 (C) employ or engage any new officer, director, employee or consultant or change the compensation or fringe benefits of any officer,
director, employee or consultant other than as required by the existing terms of contracts entered into before the date of this Agreement; 
 (D) (x) grant any option, warrant or other right to purchase, or to convert any obligation into, shares of its capital stock, (y) declare or pay any dividend or other distribution with respect to any shares of
its capital stock, or (z) issue or redeem any shares of its capital stock; 
 (E) amend its constitutional documents;

 (F) make any acquisition of any other business or other acquisition of property other than in the ordinary course of
business consistent with past practices; 
 (G) enter into or modify any Material Contract other than in the ordinary course
of business consistent with past practices; 
 (H) take any actions that would result in any of the representations or
warranties made in Section 3 hereof being untrue; or 
  

 25 

 (I) take any affirmative action or fail to take any reasonable action within its control
as a result of which any of the changes or events listed in Section 3.7 is likely to occur. 
 8.3 Use of Proceeds. The
Company shall use the proceeds from the sale of the Purchased Securities hereunder only for direct or indirect acquisition of PRC companies engaged in the retailing of digital consumer electronics and related products (the
“Retailers”); provided that any such acquisitions directly or indirectly (through its Affiliates) by the Company shall require the express written consent of the Investor. The Parties further agree that the proceeds from
the sale of the Purchased Securities hereunder shall first be deposited to the Company Account in accordance with Section 2.3 hereof, then transferred to a foreign exchange bank account of Beijing Pypo, then transferred to a RMB bank
account of Beijing Pypo. For each of the foreign exchange bank account and the RMB bank account of Beijing Pypo, Clement Kwong, the representative of the Investor, or any his successor as appointed by the Investor shall be named a signatory and any
withdrawal, disbursement or payment from, or any other transactions relating to such bank accounts shall require the signature of Clement Kwong or his successor as appointed by the Investor. Clement Kwong or his successor as appointed by
the Investor shall never be removed as a signatory of each of the foreign exchange bank account and the RMB bank account of Beijing Pypo. 
 8.4 Listing. As soon as practicable after the Closing, but in any event no later than June 30th, 2009, the Sponsors and the Company shall manage to achieve a listing of the Ordinary Shares of the Company
on New York Stock Exchange, the NASDAQ Global Market, the Hong Kong Stock Exchange Main Board, the Hong Kong Stock Exchange GEM, London Stock Exchange, London Stock Exchange AIM, Singapore Stock Exchange Main Board or any other internationally
recognized exchange (the “Listing”). Following the Closing and until a Listing has been achieved, no dividends shall be declared or paid by Beijing Pypo, and no dividend previously declared shall be paid by Beijing Pypo in cash at
any time unless the Board of Directors of Beijing Pypo (including the Investor Director) agrees that the payment of such dividends will have no material adverse impact on the cash position of Beijing Pypo. Following the Closing and until a Listing
has been achieved, the Company should ensure that no dividends shall be declared or paid by PDH(HK), and no dividend previously declared shall be paid by PDH(HK) in cash at any time unless the Board of Directors of PDH(HK) (including the Investor
Director) agrees that the payment of such dividends will have no material adverse impact on the cash position of PDH(HK). 
 8.5
Information and Inspection Rights of the Investor. 
 (i) Following the Closing, Beijing Pypo shall deliver to the Investor the following
periodic documents or reports, each to be prepared in English and in accordance with the Hong Kong Financial Reporting Standards; and the senior management employees of Beijing Pypo shall meet with the Investor promptly upon request to discuss and
answer any questions regarding such documents or reports: 
 (A) within twenty (20) days after the end of each calendar
month, a consolidated monthly management accounts of Beijing Pypo Group; 
  

 26 

 (B) within thirty (30) days after the end of each calendar quarter, a consolidated
quarterly management accounts of Beijing Pypo Group; 
 (C) within sixty (60) days after the end of each calendar year, a
consolidated annual management accounts of Beijing Pypo Group; 
 (D) within a hundred and twenty (120) days after the
end of each fiscal year of Beijing Pypo beginning 2007, (x) a consolidated income statement and statement of cash flows for Beijing Pypo Group for such fiscal year and a consolidated balance sheet for Beijing Pypo Group as of the end of the
fiscal year, audited and certified by a “big four” accounting firm or other independent certified public accountant acceptable to the Investor, and (y) a management report of the business overview of Beijing Pypo Group, including a
comparison of the financial results of such fiscal year with the corresponding annual budget; 
 (E) no later than thirty
(30) days prior to the end of each calendar year, an annual business plan of Beijing Pypo Group, including a pro forma operating budget for the succeeding calendar year and a pro forma income statement and statement of cash flows for the
succeeding three (3) calendar years. 
 (ii) Following the Closing, Beijing Pypo shall permit the Investor to visit and inspect, at the
Investor’s own expense, during normal business hours following reasonable notice to Beijing Pypo, any of the properties of the members of Beijing Pypo Group, and examine the books of account and records of each member of Beijing Pypo Group, and
discuss the affairs, finances and accounts of the members of Beijing Pypo Group with the directors, officers, senior management employees, accountants, legal counsel and investment bankers of such members, all at such reasonable times as may be
requested in writing by the Investor. 
 (iii) For the Investor’s reporting and analysis purposes, the Investor may demand from Beijing
Pypo and Beijing Pypo shall provide the Investor with, any other information and data on Beijing Pypo Group’s operations and financial conditions not previously provided, provided that the Investor shall bear the related expenses if such
information and data is to be prepared by third party professionals. 
 8.6 Related Party Transactions. All Parties agree and covenant
that any financial transactions or arrangements between any of the Sponsors or any of its Related Parties, on one side, and Beijing Pypo or any of its Related Parties, on the other side, shall be fully disclosed by the relevant Parties to all
Directors of the Company and shall be conducted on arms-length basis and competitive market terms. 
 8.7 Governmental Filings and
Registrations. Each of the Company, Beijing Pypo and the Sponsors shall use its/his best efforts to ensure that all filings and registrations with all Governmental Authorities required in respect of the Affiliated Entities, including
without limitation the registrations with the PRC Ministry of Commerce, the PRC Ministry of Information Industry, the PRC SAIC, the PRC SAFE, tax bureaus, customs authorities, product registration authorities, health regulatory authorities and the
state, provincial and local counterparts of each of the aforementioned governmental authorities, as applicable, as required in connection with the Restructuring and the transactions contemplated under the Principal Agreements shall be duly completed
in accordance with the relevant rules and regulations. 
  

 27 

 8.8 SAFE Compliance. The Company (and any of its Subsidiaries following the Closing), Beijing Pypo
and the Sponsors shall fully comply with all applicable PRC Laws relating to the filing, registration and reporting to SAFE or any of its local branches with respect to the Restructuring, the transactions contemplated under the Principal Agreements,
any foreign exchange transactions, investments, changes or occurrence of significant events. If the Investor or any transferee of the Purchased Securities is a “Domestic Resident” as defined in Circular 75, or is subject to the SAFE
registration or reporting requirements under Circular 75, in each case as determined by the Board of Directors of the Company (with the advice of counsel to the Company), the Company shall take all the reasonable actions and execute such instruments
on behalf of the Investor as necessary to comply with the applicable SAFE registration or reporting requirements under Circular 75. 
 8.9
Notice of Litigation and Proceedings. The Company and Beijing Pypo shall give prompt notice in writing to the Investor of any litigation, arbitral proceedings and regulatory proceedings affecting the Company, Beijing Pypo Group or any of
the property of any of the foregoing. 
 8.10 Redemption. If by March 31, 2008, the aggregate Guaranteed Net Profit of all the
Retailers acquired by Beijing Pypo following the Closing attributable to Beijing Pypo does not meet RMB 40,000,000 (forty million), the Investor may at its sole discretion, choose to, but is not obligated to, terminate the Investment and request a
redemption of all the Purchased Securities. Upon such redemption request by the Investor, the Company, the Sponsors and Beijing Pypo shall have the joint and several obligation to promptly redeem the Purchased Securities from the Investor, and as
consideration thereof, to pay US$90,000,000 (Ninety Million US Dollars) to the Investor within sixty (60) days of the redemption request, in such manner (including form of payment) as satisfactory to the Investor. 
 9. Confidentiality. 
 9.1 Disclosure of Terms.
The terms and conditions of the Principal Agreements, any term sheet or memorandum of understanding entered into pursuant to the transactions contemplated hereby, any other agreements executed as of the date hereof, all exhibits and schedules
attached hereto and thereto, and the transactions contemplated hereby and thereby (collectively, the “Financing Terms”), including their existence, shall be considered confidential information and shall not be disclosed by any Party
hereto to any third party except as permitted in accordance with the provisions set forth below. 
 9.2 Permitted Disclosures.
Notwithstanding the foregoing, the Company may disclose (i) the existence of the Investment to its bona fide prospective investors, employees, bankers, lenders, accountants, legal counsels and business partners, or to any other person or entity
to which disclosure is pre-approved in writing by the Investor, and (ii) the Financing Terms to its current investors, employees, bankers, lenders, accountants and legal counsels, in each case only where such persons or entities are under
appropriate nondisclosure obligations substantially similar to those set forth in this Section 9, or to any 

  

 28 

 
other person or entity to which disclosure is pre-approved in writing by the Investor. The Investor may disclose (i) the existence of the Investment and
the Financing Terms to any partner, limited partner, former partner, potential partner or potential limited partner of the Investor or other third parties and (ii) the fact of the Investment to the public, in each case as it deems appropriate
in its sole discretion. Any Party hereto may also provide disclosure in order to comply with applicable Laws, as set forth in Section 9.3 below. 
 9.3 Legally Compelled Disclosure. In the event that any Party is requested or becomes legally compelled (including without limitation, pursuant to any applicable tax, securities, or other Laws and
regulations of any jurisdiction) to disclose the existence of this Agreement or content of any of the Financing Terms, such Party (the “Disclosing Party”) shall provide the other Parties hereto with prompt written notice of that
fact and shall consult with the other Parties hereto regarding such disclosure. At the request of any other Party, the Disclosing Party shall, to the extent reasonably possible and with the cooperation and reasonable efforts of the other Parties,
seek a protective order, confidential treatment or other appropriate remedy. In any event, the Disclosing Party shall furnish only that portion of the information that is legally required and shall exercise reasonable efforts to obtain reliable
assurance of confidential treatment of such disclosed information. 
 9.4 Other Exceptions. Notwithstanding any other provision of
this Section 9, the confidentiality obligations of the Parties shall not apply to: (a) information which a restricted party learns from a third party having the right to make the disclosure; provided, that the restricted
party shall comply with any restrictions imposed by the third party; (b) information which is rightfully in the restricted party’s possession prior to the time of disclosure by the protected party and not acquired by the restricted party
under a confidentiality obligation; or (c) information which enters into the public domain without breach of confidentiality by the restricted party. 
 9.5 Press Releases, Etc. Except for any announcements which are required to be made by Golden Meditech in compliance with the applicable Laws in relation to the Hong Kong Stock Exchange GEM, no announcements
regarding the Investor’s Investment in the Company may be made by any Party hereto in any press conference, professional or trade publication, marketing materials or otherwise to the public without the prior written consent of the Investor and
the Company; provided, that any such announcement made by the Investor shall not be subject to the consent of the Company. 
 9.6
Prior Agreements. The provisions of this Section 9 shall terminate and supersede the provisions of any separate nondisclosure agreement executed by any of the Parties hereto with respect to the transactions
contemplated hereby, including the Term Sheet, dated as of July 10, 2007 and as amended as of September 11, 2007. 
 9.7
Notices. All notices required under this Section 9 shall be made pursuant to Section 11.4 of this Agreement. 
 10.
Indemnification. 
 10.1 Survival of Representations and Warranties. The representations and warranties set forth under Sections
3 and 5 shall survive until the earlier of (i) the expiration of the period during which, under applicable Laws, the ability of the Investor to sell, assign, 

  

 29 

 
transfer, pledge, hypothecate or otherwise encumber or dispose of any Ordinary Shares owned by the Investor is restricted following the Listing,
(ii) the date neither the Investor nor its Affiliates hold any Ordinary Shares, and (iii) the date of three (3) years following the Closing (such survival period shall be referred hereafter as the “Survival Period”),
and such warranties and representations shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of the Investor. 
 10.2 Indemnity. 
 (i) Each of the Company, Beijing Pypo and the Sponsors shall, severally and jointly,
indemnify the Investor for any losses, Liabilities, damages, Liens, penalties, costs and expenses, including reasonable advisor’s fees and other reasonable expenses of investigation and defense of any of the foregoing (but excluding any
consequential, speculative or punitive damages) (collectively, the “Losses”), incurred by Investor as a result of (A) any breach or violation of any representation or warranty made by Beijing Pypo or any Sponsor in
Section 3 hereof or by the Company in Section 5 hereof, or (B) any breach by the Company, Beijing Pypo or any Sponsor of any covenant or agreement contained herein or in any of the other Principal Agreements, or
(C) any activities of members of Beijing Pypo Group or any Sponsors or the Company prior to or on the Closing. 
 (ii) If the Investor
believes that it has a claim that may give rise to an indemnity obligation hereunder, it shall give prompt notice thereof to the Company, Beijing Pypo and/or the Sponsors stating specifically the basis on which such claim is being made, the material
facts related thereto, and the amount of the claim asserted; provided that any such notice with respect to the breach of any representation or warranty shall be given within the Survival Period; provided further that any such
notice with respect to the breach of any covenant or agreement shall be given on a timely basis. 
 (iii) This Section 10 shall
not be deemed to preclude or otherwise limit in any way the exercise of any other rights or pursuit of any other remedies for the breach of the representations, warranties or covenants and agreements hereunder. 
 11. Miscellaneous 
 11.1 Governing Law. This
Agreement shall be governed by and construed under the Laws of Hong Kong, without regard to principles of conflicts of law thereunder. 
 11.2 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile and e-mailed copies of
signatures shall be deemed to be originals for purposes of the effectiveness of this Agreement. 
 11.3 Titles and Subtitles. The
titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 
 11.4 Notices. Any notice required or permitted pursuant to this Agreement shall be given in writing and shall be given either personally or by sending it by next-day or second-day courier service, fax,
electronic mail or similar means to the address as shown 

  

 30 

 
below the signature of such Party on the signature page of this Agreement (or at such other address as such Party may designate by fifteen
(15) days’ advance written notice to the other Parties hereto in accordance with this Section 11.4). Where a notice is sent by next-day or second-day courier service, service of the notice shall be deemed to be effected by
properly addressing, pre-paying and sending by next-day or second-day service through an internationally-recognized courier a letter containing the notice, with a confirmation of delivery, and to have been effected at the expiration of two days
after the letter containing the same is sent as aforesaid. Where a notice is sent by fax or electronic mail, service of the notice shall be deemed to be effected by properly addressing, and sending such notice through a transmitting organization,
with a written confirmation of delivery, and to have been effected on the day the same is sent as aforesaid. 
 11.5 Finder’s
Fee. Each Party agrees to indemnify and to hold harmless the other Parties from any Liabilities for any broker, finder or similar fee or commission (and the reasonable costs and expenses of defending against such liability or asserted liability)
incurred by such Party in connection with the transactions contemplated hereunder. 
 11.6 Further Assurance. Each of the Parties
agrees to execute such further instruments, documents and other writings, and to take such further action as may be reasonably necessary to carry out the full intent of this Agreement. 
 11.7 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the Parties hereto whose rights or obligations hereunder are affected by such terms and conditions. The rights of the Investor hereunder are assignable in connection with the transfer (subject to
applicable securities and other Laws) of all or partial Purchased Securities held by the Investor; provided, however, that (a) the Investor shall, prior to the effectiveness of such transfer, furnish to the Company written notice
of the name and address of such transferee and the number of shares of Purchased Securities that are being assigned to such transferee, (b) any such transferee shall receive such assigned rights subject to all the terms and conditions of this
Agreement. This Agreement, and the rights and obligations hereunder, shall not otherwise be assigned without the mutual written consent of the Parties hereto. Nothing in this Agreement, express or implied, is intended to confer upon any Party other
than the Parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 
 11.8 Transaction Expenses. Each Party shall pay all of its own costs and expenses incurred in connection with the negotiation, execution, delivery
and performance of this Agreement and other Principal Agreements and the transactions contemplated hereby and thereby (the “Transaction Expenses”); provided that the Company shall pay all reasonable Transaction Expenses
incurred or to be incurred by the Investor in conducting due diligence investigations on the Company and Beijing Pypo Group and in preparing, negotiating and executing all documentation (including without limitation the Principal Agreements, and any
other agreements executed as of the date hereof), including all reasonable documented fees and expenses of any outside legal counsel, accounting and other professional advisors, up to a maximum aggregate amount of US$1,350,000. If any action at law
or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees and expenses in addition to any other relief to which such party may be entitled. 
  

 31 

 11.9 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Parties hereto. 
 11.10 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable Law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 
 11.11 Entire Agreement. The Principal Agreements and any other agreements executed as of the date hereof, together with all schedules and exhibits
hereto and thereto, constitute the entire agreement among the Parties. For the avoidance of doubt, this Agreement shall be deemed to terminate and supersede the provisions of the Term Sheet dated as of July 10, 2007, as amended as of
September 11, 2007. 
 11.12 Dispute Resolution. 
 (i) Any dispute, controversy or claim arising out of or relating to this Agreement, or the interpretation, breach, termination or validity hereof, shall first be subject to resolution through consultation of the
Parties to such dispute, controversy or claim. Such consultation shall begin within seven (7) days after one Party hereto has delivered to any other Party(ies) hereto a written request for such consultation. If within thirty (30) days
following the commencement of such consultation the dispute cannot be resolved, the dispute shall be submitted to arbitration upon the request of either Party with notice to the other. 
 (ii) The arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong International Arbitration Centre (the
“Centre”). There shall be three arbitrators. Each party in the dispute shall select one arbitrator within thirty (30) days after giving or receiving the demand for arbitration. Such arbitrators shall be freely selected, and the
Parties shall not be limited in their selection to any prescribed list. The Chairman of the Centre shall select the third arbitrator, who shall be qualified to practice law in Hong Kong. If either party does not appoint an arbitrator who has
consented to participate within thirty (30) days after selection of the first arbitrator, the relevant appointment shall be made by the Chairman of the Centre. 
 (iii) The arbitration proceedings shall be conducted in English. The arbitration tribunal shall apply the Arbitration Rules of the Centre in effect at the time of the arbitration. However, if such rules are in
conflict with the provisions of this Section 11.12, including the provisions concerning the appointment of arbitrators, the provisions of this Section 11.12 shall prevail. 
 (iv) The arbitrators shall decide any dispute submitted by the Parties to the arbitration strictly in accordance with the substantive Laws of Hong Kong
and shall not apply any other substantive Law. 
  

 32 

 (v) Each Party hereto shall cooperate with the others in making full disclosure of and providing complete
access to all information and documents requested by the others in connection with such arbitration proceedings, subject only to any confidentiality obligations binding on such Party. 
 (vi) The award of the arbitration tribunal shall be final and binding upon the disputing Parties, and either Party may apply to a court of competent
jurisdiction for enforcement of such award. 
 (vii) Either Party shall be entitled to seek preliminary injunctive relief, if possible, from
any court of competent jurisdiction pending the constitution of the arbitral tribunal. 
 11.13 Rights Cumulative. Each and all of the
various rights, powers and remedies of a Party hereto will be considered to be cumulative with and in addition to any other rights, powers and remedies which such Party may have at law or in equity in the event of the breach of any of the terms of
this Agreement. The exercise or partial exercise of any right, power or remedy will neither constitute the exclusive election thereof nor the waiver of any other right, power or remedy available to such Party. 
 11.14 Interpretation. Unless a provision hereof expressly provides otherwise: (i) the term “or” is not exclusive; (ii) words
in the singular include the plural, and words in the plural include the singular; (iii) the terms “herein,” “hereof,” and other similar words refer to this Agreement as a whole and not to any particular section, subsection,
paragraph, clause, or other subdivision; (iv) the term “including” will be deemed to be followed by “, but not limited to,”; (v) the masculine, feminine, and neuter genders will each be deemed to include the
others; (vi) the terms “shall,” “will,” and “agrees” are mandatory, and the term “may” is permissive; and (vii) the term “day” means “calendar day”. 
 11.15 No Waiver. Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof will not be deemed a waiver of
such term, covenant, or condition, nor will any waiver or relinquishment of, or failure to insist upon strict compliance with, any right, power or remedy power hereunder at any one or more times be deemed a waiver or relinquishment of such right,
power or remedy at any other time or times. 
 11.16 No Presumption. The Parties acknowledge that any applicable Law that would
require interpretation of any claimed ambiguities in this Agreement against the drafting party has no application and is expressly waived. If any claim is made by a Party relating to any conflict, omission or ambiguity in the provisions of this
Agreement, no presumption or burden of proof or persuasion will be implied because this Agreement was prepared by or at the request of any Party or its counsel. 
 11.17 Use of English Language. This Agreement has been executed and delivered in the English language. Any translation of this Agreement into another language shall have no interpretive effect. All
documents or notices to be delivered pursuant to or in connection with this Agreement shall be in the English language or, if any such document or notice is not in the English language, accompanied by an English translation thereof, and the English
language version of any such document or notice shall control for purposes thereof. 
  

 33 

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

  

					
	COMPANY:	 	PYPO DIGITAL COMPANY LIMITED
			
		 	By:	 	 /s/    Kam Yuen

		 	Name:	 	Kam Yuen
		 	Title:	 	Authorized Signatory
		
		 	Address:
		
		 	48/F, Bank of China Tower,
		 	1 Garden Road, Central, Hong Kong

  

 34 

					
	BEIJING PYPO:	 	 BEIJING PYPO TECHNOLOGY GROUP
 COMPANY LIMITED

			
		 	By:	 	 /s/    ZHANG Kuo

		 	Name:	 	ZHANG Kuo
		 	Title:	 	Authorized Signatory
		
		 	Address:
		
		 	South3/F
		 	Chang’AnXiongRong Center
		 	No.1 NaoShiKou Street
		 	XiCheng District
		 	Beijing, PRC
		 	Tel: +86 10 58325858    Fax: +86 10 58325859

  

 35 

					
	INVESTOR:	 	ARCH DIGITAL HOLDINGS LTD.
			
		 	By:	 	 /s/    Clement Kwong

		 	Name:	 	Clement Kwong
		 	Title:	 	Director
		
		 	Address:
		
		 	c/o ARC Capital Holdings Limited
		 	Suite 4703 Plaza 66 Tower 2
		 	 1366 Nanjing Road West
 Shanghai, PRC
200040
 Tel: +8621 61135818    Fax: +86 61135806

		
		 	c/o ARC Capital Holdings Limited
		 	13/F St. John’s Building
		 	 33 Garden Road
 Central, Hong
Kong
 Tel: +852 3115 0243    Fax: +852 3115 0244

  

 36 

					
	SPONSORS:	 	GOLDEN MEDITECH COMPANY LIMITED
		
		 	

			
		 	By:	 	 /s/    Kam Yuen

		 	Name:	 	Kam Yuen
		 	Title:	 	Chairman
		
		 	Address:
		
		 	48/F, Bank of China Tower,
		 	1 Garden Road, Central, Hong Kong
		
		 	CHINA BRIGHT GROUP CO., LTD.
		
		 	

			
		 	By:	 	 /s/    Kam Yuen

		 	Name:	 	Kam Yuen
		 	Title:	 	Chairman
		
		 	Address:
		
		 	48/F, Bank of China Tower,
		 	1 Garden Road, Central, Hong Kong
		
		 	STYLE TECHNOLOGY DEVELOPMENT LIMITED
		
		 	

			
		 	By:	 	 /s/    CHAN Yuk Han

		 	Name:	 	CHAN Yuk Han
		 	Title:	 	Director
		
		 	Address:
		
		 	South3/F
		 	Chang’AnXiongRong Center
		 	No.1 NaoShiKou Street
		 	XiCheng District
		 	Beijing, PRC
		 	Tel: +86 10 58325858    Fax: +86 10 58325859

  

 37 

			
	SPONSORS:	  	Francis WAN

		
		  	 /s/    Francis WAN

		
		  	Canadian Passport Number: BC266681
		
		  	Address:
		
		  	South3/F
		  	Chang’AnXiongRong Center
		  	No.1 NaoShiKou Street
		  	XiCheng District
		  	Beijing, PRC
		  	Tel: +86 10 58325968    Fax: +86 10 58325969
		
		  	ZHANG Kuo

		
		  	 /s/    ZHANG Kuo

		
		  	P.R. China Passport Number: 110222197101220755
		
		  	Address:
		
		  	South3/F
		  	Chang’AnXiongRong Center
		  	No.1 NaoShiKou Street
		  	XiCheng District
		  	Beijing, PRC
		  	Tel: +86 10 58325958    Fax: +86 10 58325959
		
		  	FEI Dongping

		
		  	 /s/    FEI Dongping

		
		  	P.R. China Passport Number: 430602196908171516
		
		  	Address:
		
		  	South3/F
		  	Chang’AnXiongRong Center
		  	No.1 NaoShiKou Street
		  	XiCheng District
		  	Beijing, PRC
		  	Tel: +86 10 58325858    Fax: +86 10 58325859

  

 38 

 DISCLOSURE SCHEDULE 
 to 
 EQUITY SUBSCRIPTION AGREEMENT 
 Dated November 7th, 2007 

 SCHEDULE I 
 PLAN OF RESTRUCTURING1 
 Each of China Bright and Style Tech shall acquire 91,350,000 Ordinary Shares of the Company, and in exchange,
PDH(HK), the wholly-owned subsidiary of the Company shall acquire all the registered capital of Beijing Pypo from China Bright and Style Tech. Upon the consummation of the transactions as set forth above, the shareholding structure of China Bright,
Style Tech, the Company, PDH(HK) and Beijing Pypo shall be as follows: 
 

 
  
  

	 1
	 Capitalized terms not defined in the Plan of Restructuring shall have the meanings ascribed thereto in the Equity
Subscription Agreement. 

 EXHIBIT A-1 
 FORM OF MEMORANDUM OF ASSOCIATION OF THE COMPANY 

 EXHIBIT A-2 
 FORM OF ARTICLES OF ASSOCIATION OF THE COMPANY 

 EXHIBIT B 
 COMMITMENT AND NON-COMPETE AGREEMENT 

 EXHIBIT C 
 SHAREHOLDERS AND SPONSORS AGREEMENT 

 EXHIBIT D 
 INDEMNIFICATION AGREEMENT 

 TABLE OF CONTENTS 
  

							
	 	  	 	  	Page
	1.	  	Definitions	  	3
			
	2.	  	Purchase and Sale of Shares	  	6
				
		  	2.1	  	Sale and Issuance of Ordinary Shares	  	6
				
		  	2.2	  	Closing	  	6
				
		  	2.3	  	Company Account	  	6
			
	3.	  	Representations and Warranties of the Sponsors and Beijing Pypo	  	7
				
		  	3.1	  	Organization, Good Standing and Qualification	  	7
				
		  	3.2	  	Capitalization and Voting Rights	  	7
				
		  	3.3	  	Authorization	  	7
				
		  	3.4	  	Tax Matters	  	8
				
		  	3.5	  	Constitutional Documents; Books and Records	  	9
				
		  	3.6	  	Financial Statements	  	9
				
		  	3.7	  	Changes	  	9
				
		  	3.8	  	Litigation	  	11
				
		  	3.9	  	Liabilities	  	11
				
		  	3.10	  	Commitments	  	12
				
		  	3.11	  	Compliance with Laws	  	13
				
		  	3.12	  	Title; Liens; Permits	  	14
				
		  	3.13	  	Subsidiaries	  	14
				
		  	3.14	  	Compliance with Other Instruments	  	14
				
		  	3.15	  	Registration Rights	  	15
				
		  	3.16	  	Related Party Transactions	  	15
				
		  	3.17	  	Environmental and Safety Laws	  	15
				
		  	3.18	  	Intellectual Property Rights	  	16
				
		  	3.19	  	Real Property	  	17
				
		  	3.20	  	Entire Business	  	17
				
		  	3.21	  	Labor Agreements and Actions	  	17
				
		  	3.22	  	Insurance	  	18
				
		  	3.23	  	Business Plan and Budget	  	18

  

 -i- 

 TABLE OF CONTENTS 
 (continued) 
  

							
	 	  	 	  	 	  	Page
		  	3.24	  	Employee Intellectual Property and Confidentiality Agreement	  	19
				
		  	3.25	  	Broker	  	19
				
		  	3.26	  	Restructuring	  	19
				
		  	3.27	  	Disclosure	  	19
			
	4.	  	Representations and Warranties of the Investor	  	19
				
		  	4.1	  	Status	  	19
				
		  	4.2	  	Authorization	  	19
				
		  	4.3	  	Purchase for Own Account	  	19
				
		  	4.4	  	No Public Market	  	20
			
	5.	  	Representations and Warranties of the Company	  	20
				
		  	5.1	  	Organization, Good Standing and Qualification	  	20
				
		  	5.2	  	Capitalization and Voting Rights	  	20
				
		  	5.3	  	Authorization	  	20
				
		  	5.4	  	Valid Issuance of Shares	  	21
				
		  	5.5	  	Governmental Consents	  	21
				
		  	5.6	  	Offering	  	21
			
	6.	  	Conditions of the Investor’s Obligations at Closing	  	21
				
		  	6.1	  	Representations and Warranties	  	21
				
		  	6.2	  	Performance	  	21
				
		  	6.3	  	Authorizations	  	21
				
		  	6.4	  	Closing Certificates	  	22
				
		  	6.5	  	Proceedings and Documents	  	22
				
		  	6.6	  	Memorandum and Articles	  	22
				
		  	6.7	  	Restructuring	  	22
				
		  	6.8	  	Articles of Association of Beijing Pypo	  	22
				
		  	6.9	  	Opinions of Counsel	  	23
				
		  	6.10	  	Investment Committee Approval	  	23
				
		  	6.11	  	Commitment and Non-Competition	  	23
				
		  	6.12	  	Shareholders and Sponsors Agreement	  	23
				
		  	6.13	  	Investor Director	  	23

  

 -ii- 

 TABLE OF CONTENTS 
 (continued) 
  

							
	 	  	 	  	 	  	Page
		  	6.14	  	No Litigation	  	23
				
		  	6.15	  	Disclosure Schedule	  	23
			
	7.	  	Conditions of the Company’s, the Sponsors’ and Beijing Pypo’s Obligations at Closing	  	24
			
	8.	  	Covenants and Agreements	  	24
				
		  	8.1	  	Audited Financial Statements	  	24
				
		  	8.2	  	Conduct of Business by Beijing Pypo Group	  	24
				
		  	8.3	  	Use of Proceeds	  	26
				
		  	8.4	  	Listing	  	26
				
		  	8.5	  	Information and Inspection Rights of the Investor	  	26
				
		  	8.6	  	Related Party Transactions	  	27
				
		  	8.7	  	Governmental Filings and Registrations	  	27
				
		  	8.8	  	SAFE Compliance	  	28
				
		  	8.9	  	Notice of Litigation and Proceedings	  	28
				
		  	8.10	  	Redemption	  	28
			
	9.	  	Confidentiality	  	28
				
		  	9.1	  	Disclosure of Terms	  	28
				
		  	9.2	  	Permitted Disclosures	  	28
				
		  	9.3	  	Legally Compelled Disclosure	  	29
				
		  	9.4	  	Other Exceptions	  	29
				
		  	9.5	  	Press Releases, Etc	  	29
				
		  	9.6	  	Prior Agreements	  	29
				
		  	9.7	  	Notices	  	29
			
	10.	  	Indemnification	  	29
				
		  	10.1	  	Survival of Representations and Warranties	  	29
				
		  	10.2	  	Indemnity	  	30
			
	11.	  	Miscellaneous	  	30
				
		  	11.1	  	Governing Law	  	30
				
		  	11.2	  	Counterparts	  	30
				
		  	11.3	  	Titles and Subtitles	  	30

  

 -iii- 

 TABLE OF CONTENTS 
 (continued) 
  

							
	 	  	 	  	 	  	Page
		  	11.4	  	Notices	  	30
				
		  	11.5	  	Finder’s Fee	  	31
				
		  	11.6	  	Further Assurance	  	31
				
		  	11.7	  	Successors and Assigns	  	31
				
		  	11.8	  	Transaction Expenses	  	31
				
		  	11.9	  	Amendments and Waivers	  	32
				
		  	11.10	  	Severability	  	32
				
		  	11.11	  	Entire Agreement	  	32
				
		  	11.12	  	Dispute Resolution	  	32
				
		  	11.13	  	Rights Cumulative	  	33
				
		  	11.14	  	Interpretation	  	33
				
		  	11.15	  	No Waiver	  	33
				
		  	11.16	  	No Presumption	  	33
				
		  	11.17	  	Use of English Language	  	33

  

 -iv-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00152-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00152-of-00352.parquet"}]]