Document:

Exhibit
10.7

 

LOAN AND INTEREST PLEDGE AGREEMENT

 

This Loan and Interest Pledge Agreement (the
“Agreement”) is made to be effective as of the 4th day of September,
2003, by Zhang Wanquin (“Wanquin”), Li Min (“Min”) and INTAC International,
Inc., a Nevada corporation (“INTAC”).

 

WHEREAS, INTAC desires to loan Ten Million Six Hundred
Eighty Seven Thousand Five Hundred Hong Kong Dollars ($10,687,500.00) to two
individuals, Wanquin and Min;

 

WHEREAS, Wanquin and Min desire to create an entity to
be called Tianjin Weilian (“Weilian”) and transfer such HKD $10,687,500.00 to
Weilian;

 

WHEREAS, Wanquin and Min intend to cause Weilian to
use this HKD $10,687,500.00 to purchase a forty-five percent (45%) ownership
share (the “Interest”) in a joint venture called Beijing Intac Purun
Educational Development Ltd. (“Beijing Joint Venture”);

 

WHEREAS, Wanquin and Min intend to transfer such
Interest to INTAC upon INTAC’s receipt of a nationwide  content provider license (“CP License”) for
China by the Chinese Ministry of Information Industry;

 

WHEREAS, Wanquin, Min and INTAC intend to secure the
loan from INTAC to Wanquin and Min with a security interest in the Interest;
and

 

WHEREAS, as an additional condition to in order for
Wanquin and Min to complete their obligations under this Agreement, INTAC shall
provide Seven Million One Hundred Twenty Five Thousand Hong Kong Dollars
($7,125,000.00) to two individuals, Zou Biao (“Biao”) and Wu Fengshen
(“Fengshen”) in order for Biao and Fengshen to create an entity called Tianjin Yin
Fang, which entity shall use such HKD $7,125,000.00 to acquire a thirty percent
(30%) interest in Beijing Joint Venture.

 

NOW, THEREFORE, FOR AND IN CONSIDERATION of the mutual
promises herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Wanquin, Min and INTAC agree as
follows:

 

1.             AMOUNT AND REPAYMENT
OF THE LOAN

 

1.1           Loan
Amount.  INTAC agrees, subject to
the terms and conditions of this Agreement, to extend a loan to Wanquin and Min
in a total amount of Ten Million Six Hundred Eighty Seven Thousand Five Hundred
Hong Kong Dollars ($10,687,500.00) (the “Loan”).  The Loan shall be interest-free. 
The Loan amount shall be provided to Wanquin and Min on September 22,
2003.

 

1

 

1.2           Date
of Repayment.  The Loan, together
with any other monies owing under this Agreement by Wanquin and Min, shall
become repayable upon the earliest to occur of any of the following events
(each a “Repayment Date”):

 

1.2.1        in full, on the occurrence
of an Event of Default;

1.2.2        in full, in the event that
INTAC’s application for a CP License is not granted for any reason;

1.2.3        in full or in part, at
INTAC’s sole discretion upon any date selected by INTAC.

 

1.3           Loan
Repayment.  Without INTAC’s further
written consent, repayment will be made only by means of assigning all rights,
title and interest in the Interest to INTAC by execution of an Assignment
reasonably acceptable to INTAC.  Wanquin
and Min hereby agree to assign and/or to cause Weilian to assign, all rights,
title and interest in the Interest to INTAC immediately upon INTAC’s request as
set forth below.

 

2.             REPRESENTATIONS AND
WARRANTIES OF WANQUIN AND MIN

 

2.1           Representations and
Warranties.  Each of Wanquin and Min
hereby represents and warrants to INTAC that:

 

2.1.1        the Loan will be used
solely for the purpose of establishing Weilian and purchasing the Interest;

2.1.2        they have and shall
maintain the full power and authority to enter into this Agreement, to borrow
the Loan and to perform their obligations hereunder;

2.1.3        there are no civil or
criminal, claims, actions, suits, investigations or proceedings pending or, to
their knowledge, threatened against them;

2.1.4        there is no provision of
any agreement, enforceable judgment or order of any court binding on them or
affecting their property, which would in any way prevent or materially
adversely affect their execution or performance of this agreement;

2.1.5        the execution and
performance of this Agreement and the realization of INTAC’S rights hereunder
will not violate any mortgage right, contract judgment, decree or law that is
binding upon it or its assets;

2.1.6        the Loan and/or transfer
of the Interest as contemplated herein will not result in the violation of any
term or provision of the Beijing Joint Venture and will not violate any state,
federal, international or other law;

2.1.7        they shall not, directly
or indirectly, engage in any business activities that compete with the Beijing
Joint Venture for a period of two (2) years from the effective date of this
Agreement;

2.1.8        they will, at any time,
defend the Interest against any third party claims;

2.1.9        without the consent of
INTAC, except as expressly permitted hereunder, they will not arrange or
otherwise permit or cause the issuance of any new interests in the Beijing
Joint Venture;

2.1.10      they shall do or cause to be
done all such acts, and execute or cause to be executed any necessary documents
and registrations, such that the conversion

 

2

 

of the Loan, the Interest
Transfer (defined below) and all other transactions contemplated hereunder are
effected in a legal and valid manner; and

2.1.11      they shall maintain as
strictly confidential the existence and provisions of this Agreement, as well
as of any correspondence, resolutions, ancillary agreements and any other
documentation associated herewith.

 

3.             COVENANTS

 

3.1           Affirmative
Covenants.  Each of Wanquin and Min
hereby covenants that she will furnish to
INTAC, within 10 days after the end of each month after Weilian and Beijing
Joint Venture have been established, with financial statements of such entities
and such additional information as INTAC may from time to time reasonably
request.

 

3.2           Further Covenants.  Each of Wanquin and Min further covenants
that, from the effective date hereof until full repayment of the Loan has been
effected, she will not, directly or indirectly, and will ensure that Beijing
Joint Venture does not, except with the prior written consent of INTAC:

 

3.2.1        incur or assume any debt
that is not due and payable in the ordinary course of its business;

3.2.2        incur or assume any
mortgage, pledge or other encumbrance of any kind upon any assets of Beijing
Joint Venture, whether now owned or hereafter acquired;

3.2.3        enter into any agreement,
arrangement, commitment or understanding to, or actually, acquire all or part
of the substantial assets of any third party;

3.2.4        enter into any agreement,
arrangement, commitment or understanding to, or actually, sell, lease, or
otherwise dispose of any assets of Beijing Joint Venture, except in the
ordinary course of business;

3.2.5        enter into any agreement,
arrangement, commitment or understanding to, or actually, make loans or
advances to any third party;

3.2.6        enter into any agreement,
arrangement, commitment or understanding to, or actually, assume, guarantee,
endorse or otherwise become liable for the obligation of any third party or
other entity; or

3.2.7        permit the Beijing Joint
Venture to conduct any business other than obtaining a nationwide content
provider license for China from the Chinese Ministry of Information Industry
and offering information services over mobile and internet networks pursuant to
such license.

 

3.3           Rights of INTAC.  Wanquin and Min agree that they shall obtain
INTAC’s written approval prior to undertaking any of the following, directly or
indirectly:

 

3.3.1        appointing or removing the
directors of the Beijing Joint Venture;

3.3.2        appointing or removing the
general manager of the Beijing Joint Venture;

3.3.3        approving the terms of
employment of the Beijing Joint Venture;

3.3.4        appointing or removing any
of the senior management personnel and any key personnel of the Beijing Joint
Venture;

3.3.5        approving the terms of
employment of the senior management personnel and key personnel of the Beijing
Joint Venture; and/or

 

3

 

3.3.6        approving or authorizing
any other operations of the business conducted by the Beijing Joint Venture.

 

4.             INTEREST
PLEDGE/ASSIGNMENT OF RIGHTS

 

4.1           Interest Pledge.  As security for the performance in full of
the obligations of Wanquin and Min under this Agreement, Wanquin and Min each
hereby pledges to INTAC (and will cause Weilian to pledge to INTAC), and
creates (and will cause Weilian to create) in favor of INTAC or INTAC’s
designee (as appropriate), a first priority security interest in all of the
rights, title and interest in and to:

 

4.1.1        the Interest; and

4.1.2        all of her incidental
rights with respect to the Interest, now or hereafter acquired.

 

Such security interest
shall be perfected by such actions by Wanquin and Min, individually, or on
behalf of Weilian, as may be reasonably requested by INTAC from time to time.

 

4.2           Power of Attorney.  Each of Wanquin and Min hereby irrevocably
grants and will cause Weilian to grant to INTAC or its designee (as
appropriate) full power of attorney for the purpose of carrying out the
provisions of this Agreement, as well as taking any action and executing any instrument
that INTAC in good faith deems necessary to accomplish for purposes of this
Agreement.

 

4.3           Rights Assignment.  As of the Effective Date, and without
actually assigning or transferring the Interest, Wanquin and Min agree to
assign or agree to cause Weilian, as the case may be, to assign all of their
respective rights whether economic, voting, operational or otherwise, in the
Beijing Joint Venture to INTAC.

 

5.             EVENTS OF DEFAULT

 

5.1           The occurrence of any
of the following events shall constitute a default of the Loan hereunder and a
breach of this Agreement by Wanquin and/or Min (as appropriate) (an “Event of
Default”):

 

5.1.1        Interest Transfer (as
defined below) has not been effected within ten (10) working days after the
corresponding Conversion Date (as defined below) or such time as may otherwise
be agreed upon by the Parties;

5.1.2        either Wanquin or Min is
in breach of any of the terms and conditions hereof, and such breach has not
been cured within 10 days after receipt of INTAC’s written notice of such
breach;

5.1.3        any representation or
warranty made by either Wanquin or Min herein shall prove to have been false or
misleading in any material respect;

5.1.4        Wanquin or Min makes any
arrangement with her respective creditors or takes or suffers any similar
action in consequence of debt; or

 

4

 

5.1.5        Any judgment is made under
any applicable law against Wanquin or Min that exceeds Fifty Thousand United
States Dollars ($50,000.00).

 

6.             LOAN CONVERSION

 

6.1           Share Conversion.    As
of the Repayment Date, the Loan shall be convertible into the Interest on the
basis that 100 percent of the Loan amount equals 100 percent of the Interest.
For the avoidance of doubt, if 10 percent of the Loan were repayable by Wanquin
and/or Min, then such Party or Parties, as the case may be, would be required
to transfer 10% of the Interest to INTAC. The Loan shall become repayable to
such extent as INTAC may from time to time request, until the entire Loan
amount has been repaid.   INTAC shall request to convert all or a percentage of the Loan by
means of a written notice to Wanquin and Min that specifies the percentage of
the Loan to be converted into part of the Interest (“Conversion Notice”).

 

6.2           Interest
Transfer.

 

6.2.1  Immediately
upon receipt of a Conversion Notice (“Conversion  Date”), Wanquin and Min
shall effect or cause Weilian to effect the transfer of the portion of the
Interest designated in the Conversion Notice, either to INTAC directly or to
the designee specified by INTAC in the Conversion Notice (each an “Interest
Transfer”).

 

6.2.2  For
the avoidance of doubt, upon the completion of the conversion of the Loan and
the transfer of all of the Interest of Wanquin, Min and/or Weilian, as
applicable, (whether pursuant to this Article 6 or an Event of Default), INTAC
shall hold as much of the Interest as is permissible under any published and
available laws and regulations of the People’s Republic of China (“PRC”), and
the remainder of the Interest (if applicable) shall be held by the designees of
INTAC, with Wanquin, Min and/or Weilian no longer holding any part of the
Interest. At such time, this Agreement shall be deemed to have terminated, and
the obligations of Wanquin and Min hereunder to have been fulfilled (with the
exception of those under 2.1.10 and 2.1.11).

 

6.3  Delay.    Wanquin
and Min each agrees to notify INTAC immediately of any delay in effecting an
Interest Transfer or completing the procedures described in Article 6.2 above,
together with the reason for such delay and revised effective date of the
Interest Transfer.

 

6.4  Repayment of
Loan.    The corresponding portion of the Loan shall be
deemed to have been repaid as of the effective date of each Interest Transfer.
Once Wanquin, Min and/or Weilian have completed the Interest Transfers in
accordance with the provisions of this Article 6, the Loan shall be deemed to
have been repaid in full and Wanquin and Min shall be deemed to have performed
their repayment obligations hereunder.

 

7.             MISCELLANEOUS

 

7.1  Notices and
Delivery.    All notices and communications among
the Parties shall be made in writing and in the English language by facsimile
transmission with confirmation of transmission, delivery in person (including
courier service) or registered airmail letter to the appropriate correspondence
addresses set forth below:

 

5

 

	
  If to Wanquin:

  	
   

  	
  Apt 2-6 Tiwei. No 14
  Dong Feng Donglu

  
	
   

  	
   

  	
  Panlong Dist., Knaming,
  P.R. China

  
	
   

  	
   

  	
   

  
	
  If to Min:

  	
   

  	
  No. 19 Bita Ln, Parlong
  Dist.

  
	
   

  	
   

  	
  Knaming, P.R. China

  
	
   

  	
   

  	
   

  
	
  If to INTAC:

  	
   

  	
  Unit 3-5, 17/F.,
  Clifford Centre

  
	
   

  	
   

  	
  778-784 Cheung Sha Wan
  Road

  
	
   

  	
   

  	
  Kowloon, Hong Kong

  

 

 7.2  Timing.    The
time of receipt of the notice or communication shall be deemed to be:

 

7.2.1  If
by facsimile transmission with confirmation of transmission, at the time
displayed in the corresponding transmission record, unless such facsimile is
sent after 5:00 p.m. or on a non-business day in the place where it is
received, in which case the date of receipt shall be deemed to be the following
business day;

 

7.2.2  if
in person (including express mail), on the date that the receiving Party or a
person at the receiving Party’s address signs for the document; or

 

7.2.3  if
by registered mail, on the 10th day after the date that is printed
on the receipt of the registered mail.

 

7.3  Foreign
Exchange.  All amounts payable
by Wanquin and Min hereunder, if paid in cash pursuant to the terms of this
Agreement, shall be paid in United States Dollars.  If, as a result of foreign exchange restrictions in the PRC, it
becomes illegal for either Wanquin or Min to make any payment to INTAC in
United States Dollars, then she shall make that payment in any other currency
permitted for such purposes, as shall be stipulated by INTAC at its sole
discretion.

 

7.4  Amendments.    The
provisions of this Agreement may not be waived, modified or amended except by
an instrument in writing signed by the Parties (which instrument shall be
attached as an Appendix hereto).

 

7.5  No Waiver.    Failure
or delay on the part of any Party to exercise any right under this Agreement
shall not operate as a waiver thereof.

 

7.6  Severability.    The
invalidity of any provision of this Agreement shall not affect the validity of
any other provision of this Agreement that is unrelated to that provision.

 

7.7  Survival.    The
confidentiality obligations of the Parties hereunder shall remain in full force
and effect regardless of the termination of this Agreement for any reason.

 

6

 

7.8  Successors.    This
Agreement shall be binding upon the Parties and upon their respective
successors and assigns (if any).

 

7.9  Assignment.    Neither
Wanquin nor Min may assign or otherwise transfer her rights or obligations
under this Agreement without the prior written consent of INTAC.

 

7.10  Governing Law.    The
execution, validity, interpretation and implementation of this Agreement and
the settlement of disputes hereunder shall be governed by the laws of the State
of Texas.  The parties hereby
irrevocably consent to the jurisdiction of the state and federal courts located
in Dallas, Texas, in any action arising out of or relating to this Agreement,
and waive any other venue to which either party might be entitled by domicile
or otherwise.

 

7.11  Arbitration.    All
disputes arising out of or in connection with this Agreement shall be finally
settled under such arbitration rules as selected by INTAC in such location as
selected by INTAC  by a sole arbitrator appointed in accordance with the
selected rules conducted in the English language.

 

7.12  Entire
Agreement.    This Agreement constitutes the entire
agreement between the Parties and supersedes all prior discussions,
negotiations and agreements.

 

7.13  Language.    
This Agreement will be signed in 3 sets of originals in the Chinese
and English language, with 1 original for each Party.  The two language versions shall have equal validity and the
wording of each version shall be deemed to carry the same meaning.  In the event of any discrepancy between the
wordings of the said two versions, such discrepancy shall be interpreted
according to the purpose of this Agreement and based on the English text.

 

 

IN WITNESS WHEREOF, this
Loan and Interest Pledge Agreement is executed follows:

 

 

	
  PARTIES:

  	
  /s/ Zhang Wanquin

  	
   

  
	
   

  	
  Zhang Wanquin

  
	
   

  
	
   

  	
  /s/ Li Min

  	
   

  
	
   

  	
  Li Min

  
	
   

  
	
   

  
	
   

  	
  INTAC International,
  Inc.

  
	
   

  
	
   

  	
  By: /s/ Wei Zhou

  	
   

  
	
   

  	
  Its: Chief Executive
  Officer

  
				

 

7Exhibit 4.4

 

FIRST AMENDMENT TO THE ESCROW AGREEMENT

 

THIS FIRST
AMENDMENT TO THE ESCROW AGREEMENT BETWEEN EAST KANSAS AGRI-ENERGY, LLC (“EKAE”)
AND GARNETT STATE SAVINGS BANK as escrow agent (the “Escrow Agent”) is made and
entered into effective as of the 31st day of December, 2003 (the
“Effective Date”) by and between EKAE and the Escrow Agent.

 

WHEREAS, EKAE
and Escrow Agent agree to amend the Escrow Agreement between them.

 

NOW,
THEREFORE, it is agreed that the Escrow Agreement is amended as follows:

 

1.  Paragraph 6 is amended by deleting Paragraph
6 in its entirety and substituting in lieu thereof the following:

 

6.   TERMINATION OF ESCROW.  This Agreement and the Escrow created
hereunder shall be terminated as provided in paragraph 7 hereof or as of February
13, 2004.

 

2.  Except as specifically amended above, all of
the provisions of the Escrow Agreement shall remain in full force and effect.

 

IN WITNESS
WHEREOF, the Parties hereto have hereunto affixed their signatures as of the
day and year first written above.

 

	
  EKAE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EAST KANSAS
  AGRI-ENERGY, L.L.C.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
    /s/ William R. Pracht

  	
   

  	
   

  
	
  William R.
  Pracht, President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ESCROW
  AGENT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GARNETT
  STATE SAVINGS BANK

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Dwight Nelson

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Dwight Nelson

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

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