Sample Business Contracts


Service Agreement - Linktone Ltd. and Ankai Hu

Services Forms


                                SERVICE AGREEMENT

THIS SERVICE AGREEMENT (this "AGREEMENT") is made and entered into on 16 Jan,
2002, by and between:

LINKTONE LTD., a company established and registered in the Cayman Islands, with
its registered address at Cayman Islands, British West Indies (hereinafter
referred to as the "COMPANY"); and

MR. HU ANKAI, a citizen of the People's Republic of China, whose domicile is at
No.22 Lane 1416, Zhong Hua Road, Shanghai and whose personal ID number is
310102710118043 (hereinafter referred to as the "HU ANKAI").

NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

1.       DEFINITIONS AND INTERPRETATION

1.1      DEFINITION OF TERMS

         In this Agreement, unless the context otherwise provided, the following
         terms shall be interpreted as follows:

         (A)    "GROUP COMPANY":            means both the
                                            Company and its subsidiaries which
                                            are existing currently or will exist
                                            from time to time in the future (no
                                            matter whether the Company is a
                                            holding company or not);

         (B)    "EFFECTIVE DATE":           means 16 Jan, 2002;

         (C)    "BOARD OF DIRECTORS":       means either the Company's board of
                                            Directors or the Directors who
                                            attend the board meeting and satisfy
                                            the quorum, but excluding the
                                            administrative staff (as the case
                                            may be);

         (D)    "SHANGHAI WEILAN":          means Shanghai Weilan Computer Co.,
                                            Ltd., a limited liability company
                                            registered in Shanghai, the PRC,
                                            with its registered capital of
                                            RMB500,000. Hu Ankai is the
                                            supervisor of Shanghai Weilan and
                                            holds 40% of the equity interest
                                            therein. Presently, for purposes of
                                            business operations, Shanghai Weilan
                                            is proposed to become a limited
                                            liability company with an increased
                                            registered capital of RMB5,000,000,
                                            and Hu Ankai will hold 50% of the
                                            equity interest in Shanghai Weilan;

         (E)    "PRC":                      means the People's Republic of
                                            China. and

         (F)    "RMB":                      means the lawful currency of the
                                            PRC.

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         (G)    "LOAN AGREEMENT":           means the loan agreement entered
                                            into by and between Hu Ankai and
                                            Shanghai Huitong Information Co.
                                            Ltd. on 16 Jan, 2002.

        (H)     "SHANGHAI HUITONG           a company established and registered
                INFORMATION CO.             in the People's Republic of China,
                LTD.":                      invested by the Company (97%) and
                                            Shanghai Weilan (3%), with its
                                            address at No.28, Jiajing Road,
                                            Jiading District, Shanghai.

1.2      INTERPRETATION OF CERTAIN REFERENCES

         (A)      Unless the context otherwise provided, in this Agreement, the
                  references to:

                  (1)      "People" shall include any individual, company, legal
                           person, corporate name, partnership, joint venture,
                           association, organization or trust (whether or not
                           having separate legal personality), and the reference
                           to any of the above items shall include other items
                           as mentioned above;

                  (2)      words imparting the singular shall include the plural
                           and vice versa;

                  (3)      clauses are to the clauses of this Agreement;

         (B)      As for the purpose of this Agreement, a company will be deemed
                  as the subsidiary of another company if the latter:

                  (a)      controls the constitution of the former's board
                           members; or

                  (b)      controls over fifty percent (50%) of the former's
                           voting powers; or

                  (c)      holds over fifty percent (50%) of the former's
                           registered capital or issued shares;

                  The term of "Subsidiary" shall be interpreted accordingly.

1.3      HEADINGS OF CLAUSES

         The headings contained herein are for the convenience of reference
         only, and shall not in any way affect the meaning or interpretation of
         this Agreement.

2.       EFFECTIVE DATE

         This Agreement shall come into effect on the Effective Date, and any
         valid agreements (whether made orally or in writing) made prior to the
         Effective Date by and between Hu Ankai and the Company or any of its
         subsidiaries concerning the appointment of Hu Ankai shall all be
         substituted by this Agreement and such agreements shall be terminated
         and invalidated on the Effective Date.

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3.       CONDITIONS OF DIRECTORSHIP

3.1      The Company hereby agrees that Hu Ankai, and Hu Ankai hereby consents
         to be as director of Shanghai Weilan in accordance with and subject to
         the terms and conditions as set out herein.

3.2      Without prejudice to Clause 8 herein, the term of such directorship
         shall be three (3) years as regulated by the Articles of Association of
         Shanghai Weilan.

3.3      Company hereby employs Hu Ankai as its employee, and Hu Ankai agrees to
         accept such offer.

3.4      Hu Ankai hereby agrees if Shanghai Weilan expects to appoint other new
         director, Shanghai Weilan shall obtain the written consent of Company
         in advance.

4.       RESPONSIBILITIES AND POWERS

4.1      During the term of directorship of Shanghai Weilan herein, Hu Ankai
         shall be fully dedicated to his responsibilities on full-time basis and
         shall make his best endeavors to enhance the general benefit and
         welfare of the Shanghai Weilan.

4.2      Hu Ankai shall at any time promptly provide the Board of Directors with
         the documents, explanation and assistance concerning the business of
         Shanghai Weilan and Shanghai Huitong Information Co. Ltd or any other
         Group Company (if applicable, as director) (or provide such documents,
         explanation and assistance in writing as required by the Board of
         Directors) pursuant to the requirement of the Board of Directors.

4.3      Hu Ankai shall exercise the powers vested, or perform the duties
         granted, or act in accordance with the instructions given, by the Board
         of Directors from time to time (provided that such instructions shall
         comply with the Conditions of Appointment as contemplated hereunder).
         When Hu Ankai performs his responsibilities hereunder (provided such
         responsibilities shall comply with the Conditions of Appointment as
         contemplated hereunder), he may be required to serve not only the
         Company but also the Group Company, if necessary.

4.4      Hu Ankai shall comply with the PRC laws and regulations and the
         articles of association of Shanghai Weilan, and shall act according to
         his rights and obligations as director of Shanghai Weilan.

5.       POSITION OF DIRECTOR

5.1      When Hu Ankai accepts the directorship of Shanghai Weilan hereunder, if
         necessary, he shall also accept the appointment by the Company as
         director of certain other Group Company. When he is so appointed, if
         the Company requires, Hu Ankai shall also resign from the position of
         directorship of Group Company without consideration therefore. However,
         such resignation shall not affect the effectiveness of this Agreement.

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5.2      Once the directorship of Hu Ankai is terminated for whatever reason,
         upon the request of the Board of Directors, Hu Ankai shall resign from
         the position of Shanghai Weilan or other Group Company without
         consideration therefore and shall also resign from any other position
         and the fiduciary duty.

6.       REWARDS

         The Company shall pay or compensate Hu Ankai for all reasonable
         expenses to be paid or already paid by Hu Ankai during the performance
         of his duties hereunder against relevant payment evidence to the
         Company by Hu Ankai first upon the reasonable request of the Company.

7.       COMPENSATION

         The Company hereby agrees to compensate the Hu Ankai for the loss and
         impairment caused by his performance of his duties as the director of
         Shanghai Weilan, except for the following situations:

         (1)      Hu Ankai is in material default of his duty by intentional
                  misconduct or gross negligence; or

         (2)      Hu Ankai is found to be negligent for his duties in litigation
                  or other legal proceedings in which he is involved.

8.       TERMINATION OF DIRECTORSHIP

8.1      Without prejudice to the accumulative rights (if any) or compensation
         which the parties enjoy hereunder, except where Hu Ankai:

         (1)      ceases to act as the supervisor of Shanghai Weilan (including
                  but not limited to resignation or abdication) without the
                  approval of the Board of Directors; or

         (2)      is significantly, repeatedly or continuously in breach of his
                  duties hereunder; or

         (3)      has material malfeasance or material malpractice in the
                  performance of his duties hereunder; or

         (4)      is adjudicated for crimes or involved in relation with any
                  crime, unless the Board of Directors (considering the nature
                  of the duty to be performed and the qualification of the
                  appointment) reasonably think that such crime do not affect
                  his status as the employee of the Company; or

         (5)      has impacted the reputation or the business interest of the
                  Company or any Group Company by his action or inaction; or

         (6)      has suffered from mental disorder or has become a mental
                  patient as defined by any regulation in respect of mental
                  health; or

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         (7)      is forbidden to act as director by any laws or regulations; or

         (8)      is dismissed from the position, or is not consecutively
                  appointed (if Hu Ankai shall resign in turn in accordance with
                  the articles of association or other arrangement of Shanghai
                  Weilan at that time), as a director of Shanghai Weilan,

         Hu Ankai shall resign the directorship of Shanghai Weilan
         automatically.

8.2      Hu Ankai hereby irrevocably agrees that, in the event (a) where he
         resigns the directorship of Shanghai Weilan in accordance with Clause
         8.1; (b) this Agreement is terminated for any reason including the
         reasons stipulated in Clause 9, or (c) any of the events stipulated in
         Clause 3 of the Share Transfer Agreement between Hu Ankai and the
         Company occurs, he shall transfer the 50% of the equity interest that
         he holds in Shanghai Weilan to the person designated by the Company
         without consideration and that he shall assist in going through all
         procedures to make such designated person the supervisor of Shanghai
         Weilan (including but not limited to the amendment of the business
         license and relevant company records).

8.3      Clause 10.1 shall remain in complete effect after Hu Ankai resigns the
         directorship of Shanghai Weilan (for whatever reason).

8.4      Without prejudice to Clause 8.1(3), in the event where Hu Ankai is
         involved in crimes and, as a result of which, is not able to normally
         perform his duty as director, the Company and Shanghai Weilan shall be
         entitled to suspend his position as a director until he can continue to
         perform his duties effectively.

8.5      If Shanghai Huitong Information Co. Ltd. terminates the Loan Agreement
         in accordance with Clause 8.1 to 8.6 thereof, the Company shall be
         entitled to ask Hu Ankai to resign the directorship of Shanghai Weilan
         at any time.

9.       TERMINATION OF THIS AGREEMENT FOR MERGER OR REORGANISATION OF THE
         COMPANY

         In the event where Hu Ankai resigns the directorship of Shanghai Weilan
         due to liquidation of Shanghai Weilan for the purpose of merger or
         reorganization or Shanghai Weilan in merger or reorganization
         arrangement without liquidation of the Company, and, as a result of
         which, Hu Ankai is employed by any company with terms and conditions
         more favorable for him than those contained herein, Hu Ankai shall not
         claim for compensation for the termination of his directorship of
         Shanghai Weilan.

10.      LIMITATION TO HU ANKAI

10.1     Hu Ankai hereby warrants to the Company that he will not:

         (A)      during the term of his directorship or one year after the
                  termination of his directorship, solicit the clients or agents
                  of Shanghai Weilan, the Company or any other Group Company
                  during the term of the directorship either for himself or for

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                  any other Person, as long as Hu Ankai has been a director of
                  such other Group Company within one year before the
                  termination of the directorship; or

         (B)      during the term of his directorship or within one year after
                  the termination of his directorship, encourage any employee,
                  worker, manager or director of Shanghai Weilan, the Company or
                  any other Group Company to resign the office either for the
                  interest of himself or for any other Person, no matter whether
                  the employment agreement between such Person and the relevant
                  company is breached by such resignation.

10.2     Subject to Clause 10.1, during the term of his directorship or within
         one year after the termination of his directorship, Hu Ankai shall not
         (unless agreed by the Board of Directors in writing) directly or
         indirectly conduct any other business which competes against the
         business of the group or have any beneficial relationship in such
         business, unless the following conditions are met:

         (A)      Hu Ankai has been conducting such business prior to the
                  commencement of the same by any Group Company; or

         (B)      Hu Ankai is appointed to any important position of any
                  business during the term of his directorship hereunder, and
                  such position does not conflict with the group's benefit or
                  his responsibility for the Group Company, and is approved by
                  the majority of the Board of Directors; or

         (C)      Hu Ankai holds (directly or through agent) shares in any
                  investment project listing on any security exchange market,
                  however, without the prior permit by the Board of Directors,
                  the shares or other securities of any kind of any companies
                  held by Hu Ankai shall not exceed 2% of the issued ones.

11.      DEFAULT LIABILITIES

         If Hu Ankai is in violation of the clauses hereunder and such violation
         is not corrected (such correction shall be satisfactory to the Company)
         within the prescribed period after his receipt of a written notice from
         the Company, then such violation shall be deemed as the breach of this
         Agreement by Hu Ankai, and the Company shall be entitled to require Hu
         Ankai to, and Hu Ankai shall, upon the Company's requirement, be
         obliged to transfer 100% of the shares he holds in Shanghai Weilan to a
         designated person without consideration therefore.

12.      NOTICE

         When one party hereof sends a notice to the other party, such party can
         deliver such notice by mails with correct address (if the receiver is
         the Company, the address shall be the company address at that time as
         mentioned above, while if the receiver is the Hu Ankai, the address
         shall be his latest address known by the Company). If the notice is
         sent by mail, the delivery of the notice shall be deemed as completed
         upon presumed completion of common post procedures. If the notice is
         sent by hand, the delivery of the notice shall be deemed as completed
         upon physical delivery of such notice. Once it can

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         be evidenced that the notice has been sent out by mail with correct
         address according to relevant provisions, it shall be sufficient to
         evidence that the notice has been delivered.

13.      NON-TRANSFERABILITY

         Neither this Agreement nor the position of the Hu Ankai shall be
         transferred.

14.      GOVERNING LAW

         The execution, interpretation, performance, dispute resolution and any
         other issues relating to this Agreement shall be governed by and
         interpreted in accordance with the laws of Hong Kong SAR.

15.      LANGUAGE AND TEXT

         This Agreement is made in Chinese and English. If there is any
         inconsistency between Chinese version and English version, the English
         version shall prevail. This agreement shall be signed in two (2)
         originals, one (1) of which shall be kept by the Company and the other
         one (1) of which shall be kept by the Director.

16.      CONSISTENCY

16.1     It is the intention of the Company and Hu Ankai that the Service
         Agreement dated 1st day of September, 2000 and the Supplementary
         Agreement dated 7th day of December, 2000 shall be terminated and this
         Agreement shall prevail instead.

16.2     In the event of an inconsistency arising between the provisions of the
         aforesaid Service Agreement and Supplementary Agreement, the provisions
         of this Agreement shall prevail.

17.      MISCELLANEOUS

17.1     This Agreement may be signed in any number of counterparts, all of
         which taken together shall constitute one and the same instrument. Any
         party may enter into this Agreement by signing any such counterpart and
         each counterpart may be signed and executed by the parties and
         transmitted by facsimile transmission and shall be as valid and
         effectual as if executed as an original.

17.2     This agreement shall be signed in two (2) originals, one (1) of which
         shall be kept by the Company and the other one (1) of which shall be
         kept by Hu Ankai.

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

LINKTONE LTD.

Signature of Authorized Representative:  /s / Wu Jun
                                         ----------------------

Name: Wu Jun
Position: Chairman of the board
Signature & Name of Witness:

HU ANKAI

Signatures: /s / Hu Ankai
            -------------------
Signature & Name of Witness.

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