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Novation Agreement - Wang Xiu Ling, Sheng Yong and Shenzhen Freenet Information Technology Co. Ltd.

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                           Dated 26/th/ September 2003
                           ---------------------------


                                  WANG XIU LING


                                       and


                                   SHENG YONG


                                       and


                          SHENZHEN FREENET INFORMATION
                           TECHNOLOGY COMPANY LIMITED


                       -----------------------------------

                               NOVATION AGREEMENT

                       -----------------------------------

<PAGE>

THIS NOVATION AGREEMENT   is made as of 26/th/ September 2003

BETWEEN

(1)  WANG XIU LING, holder of the passport of People's Republic of China
     numbered PCHN143637106and whose correspondence address is at Room 3-101,
     Floor 7, Wushengdongli, Chaoyang District, Beijing ("WXL");

(2)  SHENG YONG, holder of People's Republic of China Identity Card
     numbered110108197508120016 and whose correspondence address is at Room 6,
     Unit 1, Jiwei Dormitory, 9 Huangchenggen Nanjie Street, Xicheng District,
     Beijing ("SY"); and

(3)  SHENZHEN FREENET INFORMATION TECHNOLOGY COMPANY LIMITED, a company
     incorporated with limited liability under the laws of the PRC and its
     registered address is at Room 616, Block 1, Pengyi Garden Bagua Road 2,
     Futian District, Shenzhen, PRC

     (each a "Party" and collectively "Parties").

WHEREAS

(A)  Pursuant to a Loan Agreement dated 25/th/ November 2002 and made between,
     inter alia, WXL and Shenzhen Freenet ("Original Agreement"), WXL has
     granted a loan of a principal amount of RMB136,032,781 to Shenzhen Freenet
     subject to the terms and conditions therein.

(B)  The Parties have agreed to enter into this Agreement for the purpose of
     assigning and transferring part of the interests and rights in respect of
     WXL (in particular, all rights in respect of a sum of RMB30,309,834 forming
     part of the principal loan of RMB136,032,781 granted by WXL to Shenzhen
     Freenet) under the Original Agreement to SY, subject to the terms and
     conditions set out in this Agreement.

NOW THEREFORE, IT IS AGREED as follows:

1.   INTERPRETATION

1.1  In this Agreement, the following expressions shall have the following
     meanings:-

     "Effective Date" means 26/th/ September 2003.

     "Novated Agreement" means the Original Agreement as novated and amended by
     this Agreement.

1.2  Terms defined in the Original Agreement shall have the same meaning when
     used in this Agreement unless otherwise defined herein.

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<PAGE>

2.   ASSIGNMENT

2.1  Subject to Clause 2.4 hereof, WXL and Shenzhen Freenet hereby release each
     other with effect from the Effective Date from the respective rights and
     obligations in respect of a sum of RMB30,309,834 ("Novated Loan") (being
     part of the principal loan of RMB136,032,781 ("Loan") granted by WXL to
     Shenzhen Freenet) assumed by each of them under Original Agreement. For the
     avoidance of doubt, WXL shall remain entitled to all rights and interests
     in respect of the remaining balance of the Loan (i.e. RMB105,722,947) under
     the Original Agreement and Shenzhen Freenet shall remain liable for
     repayment and satisfaction of and all obligations and liabilities relating
     to the remaining balance of the Loan (i.e. RMB105,722,947) to WXL under the
     Original Agreement.

2.2  SY and Shenzhen Freenet hereby respectively agree to perform obligations
     and to assume liabilities towards the other under the Original Agreement on
     terms and subject to conditions identical to those upon unless otherwise
     indicated herein, and subject to which, corresponding obligations and
     liabilities (in respect of the Novated Loan) specified in Clause 2.1 above
     fall to be performed and satisfied under the Original Agreement and also
     subject to Clause 2.4 hereof.

2.3  WXL hereby assigns and transfers all her rights, claims and interests in
     respect of the Novated Loan, in and under the Original Agreement to SY,
     such assignment and transfer shall take effect on and from the Effective
     Date.

2.4  Notwithstanding anything contained in Clauses 2.1, 2.2 and 2.3 hereof, it
     is agreed between the Parties that WXL shall remain liable for all
     breaches, non-compliance and/or non-performance of the Original Agreement
     in respect of the Novated Loan on the part of WXL prior to the date of this
     Agreement and shall be held solely liable for all demands, claims, losses,
     damages, costs and expenses incurred by Shenzhen Freenet and/or SY as a
     result of or incidental to the aforesaid breaches, non-compliance and
     non-performance and shall indemnify SY and/or Shenzhen Freenet and hold SY
     and/or Shenzhen Freenet indemnified from all such demands, claims, losses,
     damages, costs and expenses.

2.5  With effect from the Effective Date, Shenzhen Freenet, WXL and SY agree
     that the provisions of the Original Agreement as varied and amended by this
     Agreement shall be identical to those in existence prior to the execution
     hereof, save insofar as the same have been varied and amended hereby.

3.   CONTINUING PROVISIONS

     Save as provided for herein, the Novated Agreement and all provisions
     thereof will continue in full force and effect as the legal, valid and
     binding obligations of each of Shenzhen Freenet, WXL and SY, enforceable in
     accordance with its terms.

4.   MISCELLANEOUS

4.1  If a provision of this Agreement is or becomes illegal, invalid or
     unenforceable in any jurisdiction, that will not affect:

     (a)  the legality, validity or enforceability in that jurisdiction of any
          other

                                                                     Page 3 of 4

<PAGE>

          provision of this Agreement; or

     (b)  the legality, validity or enforceability in any other jurisdiction of
          that or any other provision of this Agreement.

4.2  This Agreement shall be subject to, governed by and construed in accordance
     with the laws of Hong Kong, the Special Administrative Region of the
     People's Republic of China ("Hong Kong") and the parties hereby irrevocably
     agrees to submit to the non-exclusive jurisdiction of the courts in Hong
     Kong.

4.3  This Agreement may be executed in any number of counterparts and by any
     party hereto in separate counterparts, each of which shall be deemed to be
     an original and all of which, when taken together, shall constitute one and
     the same document.


IN WITNESS whereof this Agreement shall be deemed to have been executed on the
date first above written.


Signed by                        )
WANG XIU LING                    )
in the presence of               )
                                 )


Signed by                        )
SHENG YONG                       )
in the presence of               )


Signed by                        )
                                 )
for and on behalf of             )
SHENZHEN FREENET INFORMATION     )
TECHNOLOGY COMPANY LIMITED       )
in the presence of               )


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