S&C comments
5.10.2004
[Translation of Chinese original]
EXHIBIT 10.1
LOAN AGREEMENT
The Loan Agreement (the "Agreement") is entered into as of March 31, 2004
in Beijing by and between the following parties.
KONGZHONG CORPORATION (the "Lender")
Legal Representative: Xxxxxx Xxxx
And
XXXXXX XXXX, XXXXXXX XXXX, XXXX XXXXX (jointly called the "Borrower")
WHEREAS,
1. The Lender and Xxxxxx Xxxx has concluded a loan agreement on May 7,
2002,under which the lender supplies a loan in US dollars equal to 700,000RMB
and Xxxxxx Xxxx has drawn all of the loan which is still outstanding till now.
Xxxxxx Xxxx and the Lender has made supplements to the above said agreement on
September 26,2003, under which, the lender provides another loan in US dollars
equal to 300,000RMB, and Xxxxxx Xxxx has drawn all of the loan which is still
outstanding till now.
2. Xxxxxxx Xxxx and the Lender has concluded a loan agreement on May 7,
2002,under which the lender supplies a loan in US dollars equal to 700,000RMB
and Xxxxxxx Xxxx has drawn all of the loan which is still outstanding till now.
3. Xxxx Xxxxx and the Lender has concluded agreement on September 26,2003, under
which, the lender provides the loan in US dollars equal to 300,000RMB, and Xxxx
Xxxxx has drawn all of the loan which is still outstanding till now.
4. Xxxxxx Xxxx is a shareholder of Beijing AirInBox Information Technologies
Co., Ltd owing 50% shares, Xxxxxxx Xxxx is a shareholder of Beijing AirInBox
Information Technologies Co., Ltd owing 35% shares, and Xxxx Xxxxx is a
shareholder of Beijing AirInBox Information Technologies Co., Ltd owing 15%
shares.
5. The borrower is expecting financial support from the Lender.
THEREFORE, THE PARTIES, THROUGH FRIENDLY NEGOTIATION BASED ON EQUAL AND
MUTUAL BENEFIT, AGREE AS FOLLOWS IN ORDER TO CONFIRM THE PERFORMANCE OF THE
ABOVE MENTIONED LOAN AGREEMENTS AND SO TO FURTHER REGULATE THE RIGHTS AND
OBLIGATIONS OF THE PARTIES:
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1. PURPOSE AND SUM OF THE LOAN
1.1 The Lender has provided Xxxxxx Xxxx a loan with a principal in
US dollars equal to RMB 1,000,000 (one million), provided
Xxxxxxx Xxxx a loan with a principal in US dollars equal to
RMB 700,000 (seven hundred thousand), provided Xxxx Xxxxx a
loan with a principal in US dollars equal to RMB 300,000
(three hundred thousand) in accordance with the terms and
conditions set forth in this Agreement (the principle sum
involved in Agreement shall respectively refers to that of
different borrowers).
1.2 The Borrower hereby confirms that they have drawn all the
loans under the above 1.1 and they are still outstanding till
now.
2. LOAN TERMS
2.1 The term for such loan will be ten (10) years, calculated from
the date when the Borrower actually draws the loan. The term
under this Agreement shall be automatically extended for
another ten years except the written notice to the opposite is
given by the Lender three months prior to the expiration of
this Agreement.
2.2 The Borrower hereby agrees and warrants that such loan
provided by the Lender shall be used only for the investment
in the Beijing AirInBox Information Technologies Co., Ltd.
Without the Lender's prior written consent, the Borrower shall
not transfer or pledge its equity interest hereunder to any
other third party.
2.3 The Lender and the Borrower jointly agree and confirm that the
Borrower shall not repay the loan in advance except for
Lender's requirement or the expiration of this agreement. The
Borrower shall repay the loan only in the following way and
amount: the Borrower shall repay the loan only by all the fund
obtained by the Borrower from transferring all of the
Borrower's equity in Beijing AirInBox Information Technologies
Co., Ltd to KongZhong Information Technologies (Beijing) Co.,
Ltd or to any other third party designated by KongZhong
Information Technology (Beijing) Co., Ltd. All of the
Borrower's equity in Beijing AirInBox Information Technologies
Co., Ltd is transferred as stipulated above and if all the
fund thereof is repaid to the Lender by the Borrower, all the
outstanding loan hereunder shall be regarded as repaid.
2.4 The Lender and the Borrower jointly agree and confirm that the
Borrower shall immediately repay the loan in advance in case
any one of the following occurs:
2.4.1 the Borrower dies or becomes a person with no or
limited capacity for civil rights;
2.4.2 Xxxxxx Xxxx and Xxxx Xxxx (the current president of
KongZhong Corporation) quit or are dismissed from
the Lender or the Lender's affiliated corporations
(if Xxxxxx Xxxx quits or is dismissed, the loan to be
immediately repaid in advance shall refer to the
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loan of himself; if Xxxx Xxxx quits or is dismissed,
the loan to be immediately repaid in advance shall
refer to the loan of Xxxxxxx Xxxx and Xxxx Xxxxx
respectively);
2.4.3 The Borrower commits crime or is involved in crime;
2.4.4 Any third party claims debt of the Borrower exceeding
RMB500,000 (five hundred thousand);
2.4.5 The foreign investors are approved to invest in
value-added telecommunication business and such
business has commenced to be examined and approved by
relevant departments in charge according to laws in
China.
3. REPRESENTATIONS AND WARRANTIES
3.1 The Borrower makes the following representations and
warranties to the Lender, and confirm that the Lender execute
and perform this agreement in reliance of such representations
and warranties:
3.1.1 The Borrower has the full capacity for civil rights
and has the power to enter into this Agreement;
3.1.2 The execution of this Agreement of the Borrower will
not violate any law or binding obligations;
3.1.3 This Agreement shall constitute binding obligations
of the Borrower;
3.1.4 The Borrower neither commits criminal behaviors nor
is involved in criminal activity;
3.1.5 Except for the prior consent of the Lender, the
Borrower shall not create any pledge over part or
whole of the Borrower's shareholder's right in
Beijing AirInBox Information Technologies Co., Ltd or
any priority for any third party with the beneficiary
neither the Lender nor its subsidiaries;
3.2 The Lender makes the following representations and warranties
to the Borrower:
3.2.1 The Lender is a company registered and validly
existing under the laws of Cayman Islands;
3.2.2 The execution and performance of this Agreement by
the Lender is in compliance with the business scope
of the Lender and the power of the Lender. The Lender
has taken proper measures and has gained
authorizations and approvals for the execution and
performance of this Agreement from the third party
and governmental departments in accordance with the
limitations of the laws and contracts which are
binding or bear influences over the Lender;
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3.2.3 This Agreement shall constitute the legal, valid and
binding obligations of the Lender, which is
enforceable against the Lender in accordance with its
terms upon its execution.
4. COMMITMENTS OF BORROWER
4.1 The Borrower, as the shareholder of Beijing AirInBox
Information Technologies Co., Ltd, hereby undertakes to
procure Beijing AirInBox Information Technologies Co., Ltd to
observe the following terms with all efforts during the term
of this Agreement:
4.1.1 It shall not modify in any way its articles of
association or alter its shareholding structure
without the prior written consent of the Lender;
4.1.2 It shall maintain the operation of its business
according to normal financial and commercial codes
and practices;
4.1.3 It shall not transfer or dispose of any material
asset, or create any other security interest neither
for the Lender nor for its subsidiaries over the same
without the prior written consent of the Lender;
4.1.4 It shall not provide any warranty or assume any debt
for any third party which is beyond its normal daily
business scope without the prior written consent of
the Lender;
4.1.5 It shall conduct all of its operations in the
ordinary course of business and maintain its asset
value;
4.1.6 It shall not enter into any material contracts
without the prior written consent of the Lender,
except those entered into 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);
4.1.7 It shall not extend any loan or credit to any party
except for the prior written consent of The Lender;
4.1.8 It shall provide the information of its finance or
business in time to the Lender as required by the
Lender;
4.1.9 It shall insure the assurances in the amount as
required by the Lender;
4.1.10 It shall not merge with or invest in any third party
without the prior written consent of the Lender;
4.1.11 It shall notify the Lender immediately when any legal
action, arbitration or administrative procedure
relating to its assets, operations and incomes occurs
or is likely to occur;
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4.1.12 It shall not declare in any way any bonus or
dividends for its shareholders without the prior
written consent of the Lender;
4.2 The Borrower further commit to the Lender within the term of
this Agreement as follows:
4.2.1 It shall take all the measures to guarantee and
maintain its identification and status as a
shareholder of Beijing AirInBox Information
Technologies Co., Ltd;
4.2.2 it shall not transfer, dispose of any of its share
rights in Beijing AirInBox Information Technologies
Co., Ltd, or create any guarantee in any way;
4.2.3 it shall procure that the shareholders' meeting of
Beijing AirInBox Information Technologies Co., Ltd
shall not pass any decision about its merger with or
investment in any third party without the prior
written consent of the Lender;
4.2.4 It shall notify the Lender immediately when any legal
action, arbitration or administrative procedure
relating to its shareholder's right in Beijing
AirInBox Information Technologies Co., Ltd, occurred,
occurs or is likely to occur;
4.2.5 it shall not carry out any action bearing material
influences on the assets, business, obligations or
liabilities of Beijing AirInBox Information
Technologies Co., Ltd without prior written consent
of the Lender;
4.2.6 it shall immediately and unconditionally transfer all
or part of it shares in Beijing AirInBox Information
Technologies Co., Ltd to KongZhong Information
Technology(Beijing) Co.,Ltd or any third party
designated by KongZhong Information
Technology(Beijing) Co.,Ltd in accordance with
Chinese laws and procure all the other shareholders
of Beijing AirInBox Information Technologies Co., Ltd
waiver any prior right over purchasing such shares,
as required by the KongZhong Information
Technology(Beijing) Co.,Ltd;
4.2.7 it shall procure all the other shareholders of
Beijing AirInBox Information Technologies Co., Ltd
immediately and unconditionally transfer all or part
of their shares in Beijing AirInBox Information
Technologies Co., Ltd to KongZhong Information
Technology(Beijing) Co.,Ltd or any third party
designated by KongZhong Information
Technology(Beijing) Co.,Ltd in accordance with
Chinese laws, as required by the KongZhong
Information Technology(Beijing) Co.,Ltd;
4.2.8 it shall strictly observe its commitments and
guarantees under this Agreement and other related
agreements.
5. DEFAULT
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If the Borrower fails to perform its repayment obligation pursuant to this
Agreement, an overdue interest at the rate of 0.01% per day upon the outstanding
amount of the loan shall be payable to the Lender.
6. CONFIDENTIALITY
6.1 The Parties acknowledge and confirm to take all possible
measures to keep confidential all the confidential materials
and information (the Confidential Information) they get to
know by this Agreement. The Parties shall not disclose,
provide or transfer such Confidential Information to any third
party without the prior written consent of the other Party. In
case of the termination of this Agreement, the accepter of the
Confidential Information shall give back or destroy all the
files, materials or software as required by the provider, and
delete any of the Confidential Information from any memory
equipments and discontinue using such Confidential
Information.
6.2 The Parties agree that this article shall survive the
modification and termination of this Agreement.
7. NOTICES
Unless a written notice of change of address is issued, all correspondence
relating to this Agreement shall be delivered in person, or by registered or
prepaid mail, or by recognized express services or facsimile to the addresses
appointed by the other party from time to time.
8. GOVERNING LAW AND DISPUTE SETTLEMENT
8.1 This Agreement shall be governed by and construed in
accordance with the laws of New York State.
8.2 All disputes arising from the interpretation and performance
of this Agreement shall initially be resolved by amicable
negotiations. If no settlement is concluded, either Party
shall have right to submit the dispute to China International
Economic and Trade Arbitration Commission (the "CIETAC") and
the arbitration proceedings shall take place in Beijing in
accordance with the current rules of CIETAC and in English.
The arbitration award shall be final and binding upon all the
Parties.
8.3 In case of any disputes arising out of the interpretation and
performance of this Agreement or any pending arbitration of
such dispute, each Party shall continue to perform their
obligations under this Agreement, except for the matters
involved in the disputes.
9 FORCE MAJEURE
9.1 Force Majeure refers to any accident which is beyond the
Party's control and is inevitable with the reasonable care of
the other Party who shall be influenced, including
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but not limited to governmental activity, natural force, fire,
explosion, storm, flood, earthquake, tide, lightening or war.
However, the credit, capital or shortage of financing shall
not be deemed as the matters beyond one Party's reasonable
control. The Party influenced by the Force Majeure and seeking
for exemption hereunder shall notify the other Party as soon
as possible and inform the other Party of the measures to take
in order to accomplish the performance of this Agreement.
9.2 In case the performance of this Agreement is delayed or
cumbered by the above defined Force Majeure, the Party who is
influenced by the Force Majeure shall not bear any liability
within the scope of delay and cumbrance, and shall take all
the proper measures to reduce or eliminate the influence of
Force Majeure, and shall make efforts to renew the performance
of its obligations hereunder which has been delayed or
cumbered by the Force Majeure. Each Party shall try best to
renew the performance of this Agreement once the Force Majeure
is eliminated.
10 MISCELLANEOUS
10.1 Any modification, termination or waiver of this Agreement
shall not take effect without the written consent of each
party;
10.2 The Borrower shall not transfer its rights and obligations
hereunder to any third party without the prior written consent
of the Lender;
10.3 In case any terms and stipulations in this Agreement is
regarded as illegal or cannot be performed in accordance with
the applicable law, it shall be deemed to be deleted from this
Agreement and lose its effect and this Agreement shall remain
its effect and be treated as without it from the very
beginning. Each Party shall replace the deleted stipulations
with those lawful and effective ones, which are acceptable to
Party A, through mutual negotiation.
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
Effective Date first written above.
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PARTY A: KONGZHONG CORPORATION
Authorized Representative: /s/ Xxxx Xxxx
-------------
PARTY B: XXXXXX XXXX
Signature: /s/ Xxxxxx Xxxx
PARTY C: XXXXXXX XXXX
Signature: /s/ Xxxxxxx Xxxx
PARTY D: XXXX XXXXX
Signature: /s/ Xxxx Xxxxx
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