Xin Net Corp. recently announced that it has entered into a definitive agreement to acquire 51% of Beijing QuickNet Corp. (QuickNet), an enterprise SMS provider based in Beijing.

In order to comply with current Chinese legislation, 49% of QuickNet will be transferred to Xin Net upon closing, in exchange for 6,120,000 Xin Net common shares. The remaining 2% will be conveyed for US$100 when either of the following is completed to the satisfaction of Xin Net Corp., (1) the appropriate government ministry in China approving the transfer of the 2%, or (2) an acceptable legal mechanism for the transfer of the 2% ownership is arranged.

Xin Net has a 2-year option to acquire the remaining 49% of QuickNet. Exercise price is US$4,000,000 in cash/shares in year 1 and US$5,000,000 in year 2. Furthermore, Xin Net Corp. has full and unrestricted rights to appoint the entire Board of Directors of QuickNet for as long as Xin Net is a shareholder. The board will have the exclusive right to appoint officers and managers. The completion of this transaction is subjected to a satisfactory audit of QuickNet and regulatory approval.


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