EXHIBIT 10.9
ASSETS TRANSFER AGREEMENT
This Assets Transfer Agreement (hereafter "Agreement") made by both parties on
June 22, 2001 in Beijing.
THE PARTIES:
Party A (Transferor): Beijing Xin Hai Technology Development Ltd.
Registered Address: Room 1858, New Century Office Tower, Xx.0
Xxxxxxxx Xxxx, Xxxxxxx Xxxxxxxxx, Xxxxxxx
Legal Representative: Xxxxxxxx Xx
Party B (Transferee): Beijing Sino Soft Intel Information
Technology Ltd.
Registered Address: 2nd floor, No. 9 A, East Tucheng Rd,
Heping Street, Chaoyang District, Beijing.
Legal Representative: Xxx Xxx
Recital:
1. Party A possesses certain ISP assets including equipment and related
operating equipment that is capable of providing ISP services to the
general public prior to the effective date of this Agreement. Party A
wishes to transfer the above mentioned assets, related permits,
software, contracts, and subscribers to Party B according to the terms
of this Agreement.
2. Party B wishes to accept the above mentioned operating assets and
intangible assets including related permits, software, contracts, and
subscribers.
3. Party A agrees not to re-enter the Internet access business (i.e. ISP
services) in the future.
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Through friendly negotiation, the parties come to the following agreement:
ARTICLE 1 DEFINITION
Other than specifically specified, the following terms shall have the same
meaning throughout the Agreement including all supplements and addendum:
Transfer Assets: referring to all of the Transferor's equipment and related
operating equipment that is capable of providing ISP
services to the general public prior to the effective date
of this Agreement, including related permits, software,
contracts, and subscribers.
Transfer Equipment: referring to all the fixed equipment listed in Supplement 1
of the Agreement.
Subscribers: referring to all the Transferor's ISP customers until the
effective day of the Agreement.
Technical Information:
referring to basic technical information related to the
Transfer Equipment listed in Supplement 1, and documentation
that ensures the proper operation of the Transfer Equipment
such as usage and maintenance specifications, the ISP
related operations and financial data, and subscriber
information.
Related Services: referring to the related permits and rights that accompany
the transfer as listed in Supplement 2 of this Agreement.
Employees: referring to the Transferor's employees with formal
employment contract that are associated with the Transfer
Assets as listed is in Supplement 3 of the Agreement.
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ARTICLE 2 TRANSFER ASSETS
2.1 In accordance with the provisions of this Agreement, the Transferor
agrees to transfer the above-mentioned assets to the Transferee, and
the Transferee agrees to accept such assets from the Transferor.
2.2 The Parties agree that the price of Transfer Assets to be US$700,000.
The Transferor agrees to accept payment in Renminbi with the official
exchange rate of the day as the basis of conversion.
2.3 The Transferor will provide assistance to the Transferee throughout
the transfer process.
2.4 This Agreement is subject to the approval of Xin Net shareholders at
the next General Meeting.
ARTICLE 3 TRANSFER PROCEDURE
3.1 The Transferee will assume operations of the Transfer Equipment at the
effective date of this Agreement; transfer of technical and other
intangibles should commence so as the Transferee can assume full
operations.
3.2 The Transferee will within 5 days examine and verify that the Transfer
Equipment corresponds to Supplement 1 of this Agreement. After which
an acceptance memorandum will be executed by both parties.
3.3 The Transferor will perform the process of transferring the Related
Services as listed in Supplement 2 immediately after the effective
date of the Agreement.
3.4 Unless with written notice from the Transferee, the Transferor is
responsible for all expenses (including but not limit to equipment
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maintenance, insurance, and other operating expenses) prior to the
transfer of the Transfer Equipment and Technical Information to the
Transferee.
3.5 The Transferee agrees to pay a guarantee deposit of US$ 350,000 to the
Transferor on the day of signing of this Agreement. The US$ 350,000
balance will be paid after approval is obtained from Xin Net
shareholders at the next General Meeting.
3.6 After the Transferee makes a payment, the Transferor will transfer
proportional ownership of the Transfer Assets to the Transferee. It is
after the Transferee has made all the payments that it will have total
ownership of the Transfer Assets .
ARTICLE 4 EMPLOYEES
4.1 To facilitate a smooth transfer, the parties agree that the Transferee
will continue to retain all the Transferor's employees related to the
ISP business, relieving the Transferor from all related employment
contracts.
4.2 The Transferor will provide detail information of each employee
including but not limited to their employment contract, job
description and responsibility, wages, bonus, benefit, insurance,
incentive method and other related information.
4.3 The Transferor will be responsible for the cancellation of the
existing employment contracts and try its best to entice the employee
to accept a new contract with the Transferee. The Transferor is
responsible for all employment costs prior to the effective date of
the Agreement.
4.4 The Transferee will offer six-month employment contract without
probation to employees that would like to continue with the Transferee
with the same wages and benefits. The Transferee also guarantees that
employees will not be let go without cause for six months.
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ARTICLE 5 TERMINATION
5.1 After the effect date of this Agreement, if either party breaches its
responsibility, declaration or guarantee as defined in the Agreement
or has made a false or misleading declaration, then the other party
has the right to unilaterally terminate the Agreement without
liability.
5.2 When either party unilaterally terminates the Agreement according to
the above article, it should give a written notice to the other party
and the Agreement is considered to be terminated as soon as the notice
is given.
ARTICLE 6 WARRANTIES
6.1 The Transferor hereby makes the following warranties to the
Transferee:
A. General items:
A1. The Transferor is a legal limited corporation set up based
on the Chinese Laws and has the right and ability to execute
and implement this Agreement.
A2. The Transferor has obtained all the permission and
authorization for executing and implementing this Agreement
unless indicated otherwise in this Agreement.
B. Ownership of Transfer Assets
B1. The Transferor has legal ownership and utilization rights
for all the Transfer Assets.
B2. There is no lien, mortgage, leasehold, and permission or
other burden or third party right or other restriction that
affects the Transfer Assets as defined in this Agreement.
B3. When the Transferor transfers the ownership of the Transfer
Assets to the Transferee according to the terms of this
Agreement, the Transferee will have the proportional
ownership and full utilization right for the Transfer
Assets. Execution of the ownership and utilization rights
will not conflict with any laws, regulations, or any third
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party rights. From the effective date of this Agreement up
to the day the Transferee completes all the payments and
obtains full ownership of the Transfer Assets, all revenues
and expenses related to the operations of the Transfer
Assets accrue to the Transferee. At the same time the
Transferee will take proportional ownership of the Transfer
Assets. Unless with permission of the Transferor, the
Transferee cannot engage in any dealings with the portion of
the Transfer Assets in any manner that the Transferee does
not own. B4. After the effective date of this Agreement, all
revenues generated by Transfer Assets accrue to the
Transferee. If any revenue gets into the Transferor`s
account due to delays caused by transferring agency
contracts, the Transferor will credit the revenues to the
Transferee on a timely basis.
D. Technical Information
The Transferor has not granted any rights of the Technical Information,
confidential information or other utilization right to a third party. It
has no infringed on any third party right or other intellectual property by
using Technical Information. Therefore, the Transferee will not infringe
any third party right or other intellectual property by using the Technical
Information from the Transferor.
E. Lawsuit
The Transferor is not a party to any lawsuit or arbitration related to the
Transfer Assets. It also does not foresee any lawsuit or arbitration
related with the Transfer Assets.
F. Tax
F1. Before the effective date of the Agreement, the Transferor
is responsible for all taxes that it should or may bear to
the different governing bodies.
F2. After the Transferee has obtained ownership and operation
rights of the Transfer Assets, it does not have to bear any
taxes related with Transfer Assets before the effective date
as mentioned above.
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6.2 The Transferee hereby makes the following warranties to the
Transferor: The Transferee is a legal limited corporation set up based
on the Chinese Laws and has the right and ability to execute and
implement this Agreement. The Transferee has obtained all the
permission and authorization for executing and implementing this
Agreement unless indicated otherwise in this Agreement.
ARTICLE 8 COVENANT
8.1 The Transferor hereby makes the following covenants to the Transferee:
(1) The Transferor agrees to keep the Transfer Assets in good
working order prior to transferring to the Transferee. The
Transferor will maintain the assets and ensure the Transfer
Assets are in good working condition (as listed in
Supplement 1, except normal wear and tear);
(2) The Transferor guarantees that the Transferee owns the sole
user rights to the Transfer Assets from the transfer day
according to this Agreement. This however, does not affect
the Transferee's right on future claims by the Transferee
under terms of this Agreement. If disputes occur with any
third party concerning the user rights of the Transfer
Assets, it is the Transferor's responsibility to resolve the
dispute and bear all the compensation, expenses and other
responsibilities related to the dispute. If the Transferee
suffers any loss due to such third party dispute, the
Transferor is liable to compensate the Transferee for such
loss.
(3) The Transferor guarantees to finish transferring Part 1 of
Supplement 2 in a timely manner and use its best efforts to
assist the Transferee to complete Part 2 of Supplement 2.
(4) The Transferor guarantees that during interim transferring
period all the transferring procedures are legal.
8.2 The Transferee hereby makes the following covenants to the Transferor:
(1) The Transferee promises to make all the payments to the
Transferor within the stated time according to the terms of
this Agreement.
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(2) After the effective date of the Agreement, the Transferee
will continue to provide services unconditionally according
to the existing agreements between the Transferor and its
subscribers.
ARTICLE 9 BREACH OF AGREEMENT
9.1 Any of the following constitutes breach by either party:
(1) Being in breach of any of the responsibilities in this
Agreement;
(2) Being in breach of any of the warranties and covenants in
this Agreement;
(3) Any false declarations, warranties and covenants;
(4) The operating data from January to March provided by the
Transferor is severely misstated.
9.2 If either party is in breach of the Agreement after the Agreement is
effective, the other party has the right to ask for remedy within a
certain time period; or delay asset transfer or delay payment or
terminate the Agreement. It also has the right to claim compensation
and penalty from the breach party.
9.3 If either party is in breach of the Agreement after all assets have
been transferred or full payment has been made according to the terms
of the Agreement, the other party has the right to claim compensation
and penalty from the breach party.
9.4 If the Agreement is terminated due to severe breach of the Agreement
by one party, the breach party should pay 10% of the total amount of
the Contract to the other party for compensation.
9.4 If both Parties are at fault, then each party is responsible for its
own actions.
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ARTICLE 10 DISPUTE SETTLEMENT
Any disputes arising from the execution of or in connection with the
Agreement shall be settled through friendly consultations between both
Parties. In case no settlement can be arrived through consultations,
the dispute shall be submitted to Beijing Arbitration Commission for
arbitration. The arbitration decision is final and binding for both
parties.
ARTICLE 11 NOTICE
Any notice or other connection between the parties must be in written
format and may be delivered by person or sent by fax, express or
registered post. The sender should pay postage.
ARTICLE 12 EFFECTIVE DATES AND OTHERS
12.1 The condition of the Agreement to be effective: Execution by legal
representatives or authorized representatives of both parties and
sealed with both corporate seals.
12.2 Both Parties agree:
The Agreement will take effect on June 22, 2001. Prior to the
effective day, the Transferor owns and bears all the liabilities and
rights related with Transfer Assets. From the effective date of this
Agreement up to the day the Transferee completes all the payments and
obtains full ownership of the Transfer Assets, all revenues and
expenses related to the operations of the Transfer Assets accrue to
the Transferee. At the same time the Transferee will take proportional
ownership of the Transfer Assets. After the Transferee completes all
payments, the Transferee will retain full ownership of the Transfer
Assets with all its rights and privileges.
12.3 The parties will cover any omissions with Supplementary Agreements.
This Agreement and all the Supplements is deemed to have the same
legal force.
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Party A: Party B:
Legal Representative: Xxxxxxxx Xx Legal Representative: Xxx Xxx
Date: June 22, 2001 Date: June 22, 2001
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