AMENDED AND RESTATED EQUITY OPTION AGREEMENT

Exhibit 10.16

AMENDED AND RESTATED

EQUITY OPTION AGREEMENT

This Amended and Restated Equity Option Agreement (this “Agreement”) is entered in Beijing, the People’s Republic of China (“PRC”, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, for the purposes of this Agreement) and dated August 16, 2010, by and among the following parties:

(1) 1VERGE INTERNET TECHNOLOGY (BEIJING) CO., LTD. (“1Verge Internet”)

Legal Address: Xxxxxxx X, 0/X, XxxxXxxxx Xxxxx, Xx 0, Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxx

Legal Representative: Xxxxxx Xxxx Xxxxxx Xxx

(2) XXX Xxxxx, a PRC citizen whose PRC identification number is 310108197109214485, and whose residential address is Xxxx 0000, Xxxxx 0, Xxxx Xxxx International Apartment, 0 Xxxxx Xxxxxxxx Xxxx Xxxx, Xxxxxxx 000000, XXX

(3) XXX Xxxx, a PRC citizen whose PRC identification number is 310101196805284437 and whose residential address is, 1701 Tower D, Sunz Garden, 98 Jianguo Road, Beijing, PRC

(Each of XXX Xxxxx and XXX Xxxx is hereinafter referred to as a “Grantor” and collectively the “Grantors”)

WHEREAS:

A. 1Verge Internet is a wholly foreign-owned enterprise, duly established and registered in Beijing under the laws of the PRC.

B. The Grantors together hold 100% of the registered capital of Beijing Jiaheyi Advertising Co., Ltd. (“Jiaheyi”), a limited liability company, with a registered capital of RMB 100,000. (the “Equity Interests”), of which XXX Xxxxx and XXX Xxxx hold 80% and 20%, respectively.

C. The Grantors entered into an Amended and Restated Loan Agreement on August 16, 2010 (the “Loan Agreement”), pursuant to which 1Verge Internet extended loans in an aggregate amount of RMB 80,000 to XXX Xxxxx and RMB 20,000 to XXX Xxxx respectively (collectively, the “Loans”).

D. Each of the Grantors has agreed to grant exclusively to 1Verge Internet an option to acquire the Equity Interests that have been registered in his/her name, subject to the terms and conditions set forth below. The Grantors entered into two Share Option Agreements with 1Verge Internet with respect to the grant of the option to acquire Equity Interest to 1Verge Internet before the date of this Agreement (collectively, the “Previous Option Agreements”), which were in form and substance similar to this Agreement. The Grantors and 1Verge Internet have strictly complied with all stipulations under the Previous Option Agreements. The Grantors and 1Verge Internet believe it in the best interest of all parties to amend and restate the Previous Option Agreements.

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THEREFORE, Through Friendly Negotiation In The Principle Of Equality And Common Interest, The Parties Agree As Follows:

SECTION 1: GRANT OF THE OPTION

1.1 Grant of Option

Each of the Grantors hereby grants to 1Verge Internet an option (each an “Option” and collectively the “Options”) to acquire their respective Equity Interests at the price equivalent to the lowest price then permitted by PRC laws, and 1Verge Internet shall make payment of such price by cancelling all or a portion of the Loans. Each of the Options shall become vested as of the date of this Agreement.

1.2 Term

This Agreement shall take effect as of the Effective Date and shall remain in full force and effect until the earlier of (1) the date on which all of the Equity Interests have been acquired by 1Verge Internet directly or through its designated representative (individual or legal person); or (2) the unilateral termination by 1Verge Internet (at its sole and absolute discretion), by giving 30 days prior written notice to the Grantors of its intention to terminate this Agreement.

1.3 Consideration of Options

The Grantors acknowledge that 1Verge Internet’s provision of the Loans to the Grantors is deemed to be the consideration for the grant of the Options, the sufficiency and payment of which have been acknowledged and recognized.

1.4 EFFECTIVE DATE

This Agreement shall be effective upon its being signed by the parties hereunder (“Effective Date”).

SECTION 2: EXERCISE OF THE OPTION AND ITS CLOSING

2.1 Timing of Exercise

2.1.1 Each of the Grantors agrees that 1Verge Internet in its sole discretion may at any time, and from time to time after the date hereof, exercise the Option granted by such Grantor, in whole or in part, to acquire all or any portion of their respective Equity Interests.

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2.1.2 For the avoidance of doubt, each of the Grantors hereby agrees that 1Verge Internet shall be entitled to exercise the Option granted by such Grantor for an unlimited number of times, until all of his/her Equity Interests have been acquired by 1Verge Internet.

2.1.3 Each of the Grantors agrees that 1Verge Internet may designate in its sole discretion any third party to exercise the Option granted by such Grantor on its behalf, in which case 1Verge Internet shall provide written notice to such Grantor at the time the Option granted by such Grantor is exercised.

2.2 Transfer

Each of the Grantors agrees that the Option grant by such Grantor shall be freely transferable, in whole or in part, by 1Verge Internet to any third party, and that, upon such transfer, the Option may be exercised by such third party upon the terms and conditions set forth herein, as if such third party were a party to this Agreement, and that such third party shall assume the rights and obligations of 1Verge Internet hereunder.

2.3 Notice Requirement

2.3.1 To exercise an Option, 1Verge Internet shall send a written notice to the relevant Grantor, and such Option is to be exercised by no later than ten (10) days prior to each Closing Date (as defined below), specifying therein:

2.3.1.1 The date of the effective closing of such acquisition (a “Closing Date”);

2.3.1.2 the name of the person in which the Equity Interests shall be registered;

2.3.1.3 the amount of Equity Interests to be acquired from such Grantor;

2.3.1.4 the type of payment; and

2.3.1.5 a letter of authorization, where a third party has been designated to exercise the Option.

2.3.2 For the avoidance of doubt, it is expressly agreed among the parties that 1Verge Internet shall have the right to exercise the Options and elect to register the Equity Interests in the name of another person as it may designates from time to time.

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2.4 Closing

On each Closing Date, 1Verge Internet shall make payment by cancelling all or a portion of the Loans payable by such Grantor to 1Verge Internet, in the same proportion that 1Verge Internet or its designated party acquires the Equity Interest held by such Grantor.

SECTION 3: COMPLETION

3.1 Capital Contribution Transfer Agreement

Concurrently with the execution and delivery of this Agreement, and from time to time upon the request of 1Verge Internet, each of the Grantors shall execute and deliver one or more capital contribution transfer agreements, each in the form and content substantially satisfactory to 1Verge Internet (each a “Transfer Agreement”), together with any other documents necessary to give effect to the transfer to 1Verge Internet or its designated party of all or any part of the Equity Interests upon an exercise of the Option by 1Verge Internet (the “Ancillary Documents”). Each Transfer Agreement and the Ancillary Documents are to be kept in 1Verge Internet’s possession.

Each of the Grantors hereby agrees and authorizes 1Verge Internet to complete, execute and submit to the relevant company registrar any and all Transfer Agreements and the Ancillary Documents to give effect to the transfer of all or any part of the Equity Interests upon an exercise of the Option by 1Verge Internet at its sole discretion where necessary and in accordance with this Agreement.

3.2 Board Resolution

Notwithstanding Section 3.1 above, concurrently with the execution and delivery of this Agreement, and from time to time upon the request of 1Verge Internet, each of Grantors shall execute and deliver one or more resolutions of the board of directors and/or shareholders of Jiaheyi, approving the following:

3.2.1 The transfer by the Grantor of all or part of the Equity Interests held by such Grantor to 1Verge Internet or its designated party; and

3.2.2 any other matters as 1Verge Internet may reasonably request.

Each Resolution is to be kept in 1Verge Internet’s possession.

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SECTION 4: REPRESENTATIONS AND WARRANTIES

4.1 Representations and Warranties

Each of Grantors represents and warrants to 1Verge Internet that:

4.1.1 he/she has the full power and authority to enter into, and perform under, this Agreement;

4.1.2 his/her signing of this Agreement or fulfilling of any its obligations hereunder does not violate any laws, regulations and contracts to which he/she is bound, or require any government authorization or approval;

4.1.3 there is no lawsuit, arbitration or other legal or government procedures pending which, based on his/her knowledge, shall materially and adversely affect this Agreement and the performance thereof;

4.14 he/she has disclosed to 1Verge Internet all documents issued by any government department that might cause a material adverse effect on the performance of its obligations under this Agreement;

4.1.5 he/she has not been declared bankrupt by a court of competent jurisdiction;

4.1.6 save as disclosed to 1Verge Internet, his/her Equity Interests is free and clear from all liens, encumbrances and third party rights;

4.1.7 he/she will not transfer, donate, pledge, or otherwise dispose of his/her Equity Interests in any way unless otherwise agreed by 1Verge Internet;

4.1.8 the Option granted to 1Verge Internet by him/her shall be exclusive, and he/she shall in no event grant the Option or any similar rights to a third party by any means whatsoever; and

4.1.9 XXX Xxxxx further represents and warrants to 1Verge Internet that she owns 80% of the Equity Interests of Jiaheyi, and XXX Xxxx further represents and warrants to 1Verge Internet that he owns 20% of the Equity Interests of Jiaheyi. The parties hereby agree that the representations and warranties set forth in Sections 4 (except for Section 4.1.9) shall be deemed to be repeated as of each Closing Date as if such representation and warranty were made on and as of such Closing Date.

4.2 Covenants and Undertakings

Each of Grantors covenants and undertakes that:

4.2.1 he/she will complete all such formalities as are necessary to make 1Verge Internet or its designated party a proper and registered shareholder of Jiaheyi. Such formalities include, but are not limited to, assisting 1Verge Internet with the obtaining of necessary approvals of the equity transfer from relevant government authorities (if any), the submission of the Transfer Agreement(s) to the relevant administration for industry and commerce for the purpose of amending the articles of association, changing the shareholder register and undertaking any other changes.

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4.2.2 he/she will not amend the articles of association, increase or decrease the registered capital, sell, transfer, mortgage, create or allow any encumbrance or otherwise dispose of the assets, business, revenues or other beneficial interests, incur or assume any indebtedness, or enter into any material contracts, except in the ordinary course of business (for the purpose of this paragraph, any contract with a value exceeding RMB 100,000 shall be deemed to be a material contract).

SECTION 5: TAXES

Any taxes and duties that might arise from the execution and performance of this Agreement, including any taxes and expenses incurred by and applicable to any of the Grantors as a result of the exercise of the Option(s) by 1Verge Internet or its designated party, or the acquisition of the Equity Interests from the Grantor(s), will be borne by 1Verge Internet.

SECTION 6: GOVERNING LAW AND DISPUTE SETTLEMENT

6.1 Governing Law

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

6.2 Friendly Consultation

If a dispute arises in connection with the interpretation or performance of this Agreement, the parties shall attempt to resolve such dispute through friendly consultations between them or mediation by a neutral third party.

If the dispute cannot be resolved in the aforesaid manner within thirty (30) days after the commencement of such discussions, either party may submit the dispute to arbitration.

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6.3 Arbitration

Any dispute arising in connection with this Agreement shall be submitted to the China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration. The arbitration shall follow the then current rules of CIETAC, and the arbitration proceedings shall be conducted in Chinese and shall take place in Beijing. The arbitration award shall be final and binding upon the parties. This article shall not be affected by the termination or elimination of this Agreement.

6.4 Matters not in Dispute

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

SECTION 7: CONFIDENTIALITY

7.1 Confidential Information

The contents of this Agreement and the annexes hereof shall be kept confidential. No party shall disclose any such information to any third party (except for the purpose described in Section 2.2 and by prior written agreement among the parties). Each party’s obligations under this clause shall survive after the termination of this Agreement.

7.2 Exceptions

If a disclosure is explicitly required by law, any courts, arbitration tribunals, or administrative authorities, such a disclosure by any party shall not be deemed a violation of Section 7.1 above.

SECTION 8: MISCELLANEOUS

8.1 Entire Agreement

8.1.1 This Agreement constitutes the entire agreement and understanding among the parties in respect of the subject matter hereof and supersedes all prior discussions, negotiations and agreements among them. This Agreement amends and restates all Previous Option Agreements. In the event of any discrepancy between this Agreement and any Previous Option Agreement, this Agreement shall prevail to the extent of the discrepant provisions. This Agreement shall only be amended by a written instrument signed by all the parties.

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8.1.2 The appendices attached hereto shall constitute an integral part of this Agreement and shall have the same legal effect as this Agreement.

8.2 Notices

8.2.1 Unless otherwise designate by the other Party, any notices or other correspondences among the parties in connection with the performance of this Agreement shall be delivered in person, by express mail, e-mail, facsimile or registered mail to the following correspondence addresses and fax numbers:

		1Verge INTERNET TECHNOLOGY (BEIJING) CO., LTD.
		Address		:		Xxxxxxx X, 0/X, XxxxXxxxx Xxxxx, Xx 0, Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxx
		Fax				:    861059708818
		Tele				:    861058851881
		Addressee		:		Xxxxxx Xxxx Xxxxxx Xxx
		XXX Xxxxx
		Address		:		Xxxx 0000, Xxxxx 0, Xxxx Xxxx International Apartment, 0 Xxxxx Xxxxxxxx Xxxx Xxxx, Xxxxxxx 000000, Xxxxx
		Fax				:    861059708818
		Tele				:    861058851881
		Addressee		:		QIN Xxxxx
		XXX Dele
		Address		:		Room 1701, Tower D, Sunz Garden, 00 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxx 000000, Xxxxx
		Fax				:    861059708818
		Tele				:    861058851881
		Addressee		:		Xxx Xxxx

8.2.2 Notices and correspondences shall be deemed to have been effectively delivered:

8.2.2.1 at the exact time displayed in the corresponding transmission record, if delivered by facsimile, unless such facsimile is sent after 5:00 pm or on a non-business day in the place where it is received, in which case the date of receipt shall be deemed to be the following business day;

8.2.2.2 on the date that the receiving Party signs for the document, if delivered in person (including express mail);

8.2.2.3 on the fifteenth (15^th) day after the date shown on the registered mail receipt, if sent by registered mail;

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8.2.2.4 on the successful printing by the sender of a transmission report evidencing the delivery of the relevant e-mail, if sent by e-mail.

8.3 Binding Effect

This Agreement, upon being signed by the parties or their duly authorized representatives, shall be binding on the parties and their successors and assigns.

8.4 Language and Counterparts

This Agreement shall be executed in three (3) originals in English, with one (1) original for 1Verge Internet, one (1) original each for Grantors.

8.5 Days and Business Day

A reference to a day herein is to a calendar day. A reference to a business day herein is to a day on which commercial banks are open for business in the PRC.

8.6 Headings

The headings contained herein are inserted for reference purposes only and shall not affect the meaning or interpretation of any part of this Agreement.

8.7 Singular and Plural

Where appropriate, the plural includes the singular and vice versa.

8.8 Unspecified Matter

Any matter not specified in this Agreement shall be handled through mutual discussions among the parties and stipulated in separate documents with binding legal effect, or resolved in accordance with PRC laws.

8.9 Survival of Representations, Warranties, Covenants and Obligations

The respective representations, warranties, covenants and obligations of the parties, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any party, and shall survive the transfer and payment for the Equity Interests.

[The space below is intentionally left blank.]

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

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

(Company Seal)

By:		/s/ Xxxxxx Xxxx Xxxxxx Xxx
Authorized Representative: Xxxxxx Xxxx Xxxxxx Xxx
GRANTOR: XXX XXXXX
By:		/s/ Xxx Xxxxx
GRANTOR: XXX XXXX
By:		/s/ Xxx Xxxx

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