The9 (NCTY) announced that GameNow.net (Hong Kong) Limited, a wholly owned subsidiary of The9, recently entered into a loan agreement with China Interactive (Singapore) Pte. Ltd., pursuant to which GameNow agreed to extend a loan to China Interactive in the principal amount of US$6 million.
The loan is based on the condition that China Interactive would grant an option to GameNow to purchase all the shares held by China Interactive in China The9 Interactive Limited (C9I) representing 31.1% of C9I and exercise the option only upon occurrence of certain events related to the loan.
The loan is interest-bearing and matures upon the first anniversary of the date on which the loan is made. GameNow has the right to demand immediate repayment of the Loan before the repayment date upon occurrence of any of the events of default set forth in the loan agreement, including a change of control of China Interactive.
Concurrently with the execution of the loan agreement, China Interactive granted an option to GameNow to purchase all C9I's shares held by China Interactive at the total purchase price equal to the principal amount of the loan plus the interest accrued thereon. GameNow may exercise the option, in whole or in part, only if China Interactive fails to repay the loan and interest accrued thereon in full on the repayment date or otherwise breaches the loan agreement, or an event of default under the loan agreement shall have occurred. In addition, China Interactive pledged all of its C9I shares to GameNow to secure the due and timely performance of its obligations under the loan agreement.
