FACILITY AGREEMENT between CHIZZ (HK) LIMITED as Borrower and Xunlei Network Technologies Limited as Lender relating to a US$20,000,000 Term Loan Facility

(1)

CHIZZ (HK) LIMITED, a corporation organized and existing under the laws of Hong Kong (the “Borrower”); and

(2)

Xunlei Network Technologies Limited, a corporation organized and existing under the laws of Hong Kong (the “Lender”).

1.

DEFINITIONS AND INTERPRETATION

1.1

Definitions

(a)

the business, operations, property, condition (financial or otherwise) or prospects of the Borrower;

(b)

the ability of the Borrower to perform its obligations under the Finance Documents; or

(c)

the validity or enforceability of this Agreement or the rights or remedies of the Lender under the Finance Documents.

(a)

subject to paragraph (c) below, if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;

(b)

if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and

(c)

if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.

(a)

which is controlled, directly or indirectly, by the first mentioned company or corporation;

(b)

more than half the issued equity share capital of which is beneficially owned, directly or indirectly, by the first mentioned company or corporation; or

(c)

which is a Subsidiary of another Subsidiary of the first mentioned company or corporation,

1.2

Construction

(a)

Unless a contrary indication appears, any reference in this Agreement to:

(i)

the “Lender”, the “Borrower”, the “Parent” or any “Party” shall be construed so as to include its successors in title, permitted assigns and permitted transferees;

(ii)

a “Finance Document” or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated;

(iii)

“including” shall be construed as “including without limitation” (and cognate expressions shall be construed similarly);

(iv)

“indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

(v)

a “person” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality); and

(vi)

a provision of law is a reference to that provision as amended or re-enacted.

(b)

Section, Clause and Schedule headings are for ease of reference only.

(c)

Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

(d)

A Default (other than an Event of Default) is “continuing” if it has not been remedied or waived and an Event of Default is “continuing” if it has not been waived.

(e)

Where this Agreement specifies an amount in a given currency (the “specified currency”) “or its equivalent”, the “equivalent” is a reference to the amount of any other currency which, when converted into the specified currency utilising The Hongkong and Shanghai Banking Corporation Limited's spot rate of exchange for the purchase of the specified currency with that other currency at or about 11 a.m. on the relevant date, is equal to the relevant amount in the specified currency.

2.

THE FACILITY

3.

PURPOSE

3.1

Purpose

3.2

Monitoring

4.

CONDITIONS OF UTILISATION

4.1

Initial conditions precedent

4.2

Further conditions precedent

(a)

no Default is continuing or would result from the proposed Loan; and

(b)

the Repeating Representations to be made by the Borrower are true in all material respects.

4.3

Maximum number of Loans

5.

UTILISATION

5.1

Delivery of a Utilisation Request

5.2

Completion of a Utilisation Request

(a)

A Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

(i)

the proposed Utilisation Date is a Business Day within the Availability Period; and

(ii)

the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount).

(b)

Only one Loan may be requested in the Utilisation Request and the Borrower may only make one Utilisation Request.

5.3

Currency and amount

(a)

The currency specified in the Utilisation Request must be U.S. Dollars.

(b)

The amount of the proposed Loan must be an amount which is not more than the Commitment.

5.4

Disbursement of Loan

5.5

Cancellation of Commitment

6.

REPAYMENT

6.1

Repayment

6.2

Reborrowing

7.

PREPAYMENT AND CANCELLATION

7.1

Illegality

(a)

the Lender shall promptly notify the Borrower upon becoming aware of that event;

(b)

upon the Lender notifying the Borrower, the Commitment will be immediately cancelled; and

(c)

the Borrower shall repay the Loan within 5 (five) Business Days after the date specified by the Lender in the notice delivered to the Borrower.

7.2

Voluntary prepayment of Loans

7.3

Restrictions

(a)

Any notice of prepayment given under this Clause 7 (Prepayment And Cancellation) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant prepayment is to be made and the amount of that prepayment.

(b)

Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid but without premium, fees or penalty.

(c)

The Borrower may not reborrow any part of the Facility which is prepaid.

(d)

If the Commitment is reduced in accordance with this Agreement, the amount of such reduction may not be subsequently reinstated.

8.

INTEREST

8.1

Calculation of interest

8.2

Payment of interest

8.3

Default interest

(a)

If the Borrower fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the Unpaid Sum from the due date to the date of actual payment (both before and after judgment) at a rate of 7 (seven) per cent. per annum and

(b)

Any interest accruing under this Clause 8.3 (Default interest) shall be immediately payable by the Borrower on demand by the Lender.

9.

INTEREST PERIODS

9.1

Interest Period

9.2

Non-Business Days

10.

TAX GROSS-UP AND INDEMNITIES

10.1

Tax definitions

(a)

In this Clause 10 (Tax Gross-Up And Indemnities):

(b)

Unless a contrary indication appears, in this Clause 10 (Tax Gross-Up And Indemnities) a reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.

10.2

Tax gross-up

(a)

All payments to be made by the Borrower to the Lender under the Finance Documents shall be made free and clear of and without any Tax Deduction unless the Borrower is required to make a Tax Deduction, in which case the sum payable by the Borrower (in respect of which such Tax Deduction is required to be made) shall be increased to the extent necessary to ensure that the Lender receives a sum net of any deduction or withholding equal to the sum which it would have received had no such Tax Deduction been made or required to be made.

(b)

The Borrower shall promptly upon becoming aware that it must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Lender accordingly.  Similarly, the Lender shall notify the Borrower on becoming so aware in respect of a payment payable to it.

(c)

If the Borrower is required to make a Tax Deduction, it shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

(d)

Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower shall deliver to the Lender evidence reasonably satisfactory to the Lender that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

10.3

Tax indemnity

(a)

Without prejudice to Clause 10.2 (Tax gross-up), if the Lender is required to make any payment of or on account of Tax on or in relation to any sum received or receivable under the Finance Documents (including any sum deemed for purposes of Tax to be received or receivable by the Lender whether or not actually received or receivable) or if any liability in respect of any such payment is asserted, imposed, levied or assessed against the Lender, the Borrower shall, within three Business Days of demand, promptly indemnify the Lender in respect of any loss or liability as a result of such payment or liability, together with any interest, penalties, costs and expenses payable or incurred in connection therewith, provided that this Clause 10.3 (Tax indemnity) shall not apply to any Tax imposed on and calculated by reference to the net income actually received or receivable by the Lender (but, for the avoidance of doubt, not including any sum deemed for purposes of Tax to be received or receivable by the Lender but not actually receivable) by the jurisdiction in which the Lender is incorporated.

10.4

Tax credit

(a)

a Tax Credit is attributable to that Tax Payment; and

(b)

the Lender has obtained, utilised and retained that Tax Credit,

10.5

Stamp taxes

(a)

pay all stamp duty, registration and other similar Taxes payable in respect of any Finance Document, and

(b)

within three Business Days of demand, indemnify the Lender against any cost, loss or liability that the Lender incurs in relation to any stamp duty, registration or other similar Tax paid or payable in respect of any Finance Document.

10.6

Indirect tax

(a)

All amounts set out or expressed in a Finance Document to be payable by the Borrower to the Lender shall be deemed to be exclusive of any Indirect Tax.  If any Indirect Tax is chargeable on any supply made by the Lender to the Borrower in connection with a

(b)

Where a Finance Document requires the Borrower to reimburse the Lender for any costs or expenses, the Borrower shall also at the same time pay and indemnify the Lender against all Indirect Tax incurred by the Lender in respect of the costs or expenses to the extent the Lender reasonably determines that it is not entitled to credit or repayment in respect of the Indirect Tax.

11.

MITIGATION BY THE LENDER

11.1

Mitigation

(a)

The Lender shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Illegality) or Clause 10 (Tax Gross-Up And Indemnities), including (but not limited to):

(i)

providing such information as the Borrower may reasonably request in order to permit the Borrower to determine its entitlement to claim any exemption or other relief (whether pursuant to a double taxation treaty or otherwise) from any obligation to make a Tax Deduction; and

(ii)

in relation to any circumstances which arise following the date of this Agreement, transferring its rights and obligations under the Finance Documents to another Affiliate.

(b)

Paragraph (a) above does not in any way limit the obligations of the Borrower under the Finance Documents.

11.2

Limitation of liability

(a)

The Borrower shall promptly indemnify the Lender for all reasonable costs and expenses incurred by it as a result of steps taken by it under Clause 11.1 (Mitigation).

(b)

The Lender is not obliged to take any steps under Clause 11.1 (Mitigation) if, in the opinion of the Lender (acting reasonably), to do so might be prejudicial to it.

12.

OTHER INDEMNITIES

12.1

Currency indemnity

(a)

If any sum due from the Borrower under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:

(i)

making or filing a claim or proof against the Borrower; or

(ii)

obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

(b)

The Borrower waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

12.2

Other indemnities

(a)

the occurrence of any Event of Default;

(b)

any information produced or approved by the Borrower being or being alleged to be misleading and/or deceptive in any respect;

(c)

a failure by the Borrower or the Parent to pay any amount due under a Finance Document on its due date or in the relevant currency;

(d)

funding, or making arrangements to fund, its participation in the Loan requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by the Lender); or

(e)

the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower.

13.

COSTS AND EXPENSES

13.1

Transaction costs

13.2

Amendment costs

13.3

Enforcement and preservation costs

14.

REPRESENTATIONS

14.1

Status

(a)

It is a corporation, duly incorporated and validly existing under the laws of Hong Kong.

(b)

It has the power to own its assets and carry on its business as it is being conducted.

14.2

Binding obligations

14.3

Non-conflict with other obligations

(a)

any law or regulation applicable to it;

(b)

its constitutional documents; or

(c)

any agreement or instrument binding upon it or any of its assets,

14.4

Power and authority

14.5

Validity and admissibility in evidence

(a)

to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party;

(b)

to make the Finance Documents to which it is a party admissible in evidence in its jurisdiction of incorporation; and

(c)

for it to carry on its business, and which are material,

14.6

Governing law and dispute resolution

(a)

The choice of Hong Kong law as the governing law of this Agreement will be recognised and enforced in its jurisdiction of incorporation.

(b)

Any judgment obtained in Hong Kong in relation to this Agreement will be recognised and enforced in its jurisdiction of incorporation.

14.7

No default

(a)

No Event of Default is continuing or might reasonably be expected to result from the making of the Utilisation.

(b)

No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it which would reasonably be expected to have a Material Adverse Effect.

14.8

No misleading information

14.9

No proceedings pending or threatened

14.10

Repetition

15.

INFORMATION UNDERTAKINGS

15.1

Financial statements

(a)

as soon as the same become available but in any event within 180 days after the end of its most recently ended financial year, its audited financial statements for the most recently ended financial year; and

(b)

as soon as the same become available, its financial statements for the most recently ended financial half year.

15.2

Information: miscellaneous

(a)

promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against the Borrower and which might, if adversely determined, have a Material Adverse Effect; and

(b)

promptly, such further information regarding the financial condition, business and operations of the Borrower as the Lender may reasonably request.

15.3

Notification of default

(a)

The Borrower shall notify the Lender of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.

(b)

Promptly upon a request by the Lender, the Borrower shall supply to the Lender a certificate signed by two of its directors on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).

16.

GENERAL UNDERTAKINGS

16.1

Authorisations

(a)

obtain, comply with and do all that is necessary to maintain in full force and effect; and

(b)

supply certified copies to the Lender of,

16.2

Compliance with laws

16.3

Ranking

16.4

Change of business

17.

EVENTS OF DEFAULT

17.1

Non-payment

17.2

Other obligations

(a)

The Borrower does not comply with any provision of the Finance Documents (other than those referred to in Clause 17.1 (Non-payment)).

(b)

No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 10 (ten) Business Days of the earlier of (i) the Lender giving notice to the Borrower of the failure to comply and (ii) the Borrower becoming aware of the failure to comply.

17.3

Misrepresentation

17.4

Insolvency

(a)

The Borrower or a Subsidiary of the Borrower is or is presumed or deemed to be unable or admits its inability to pay its debts as they fall due, suspends making payments on any of its debts or commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.

(b)

The value of the assets of the Borrower or a Subsidiary of the Borrower is less than its liabilities (taking into account contingent and prospective liabilities).

(c)

A moratorium is declared in respect of any indebtedness of the Borrower or a Subsidiary of the Borrower and such moratorium is not stayed or removed within ten (10) days.

17.5

Insolvency proceedings

(a)

the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Borrower or a Subsidiary of the Borrower;

(b)

a composition or arrangement with any creditor of the Borrower or a Subsidiary of the Borrower, or an assignment for the benefit of creditors generally of the Borrower or a Subsidiary of the Borrower, or a class of such creditors;

(c)

the appointment of a liquidator, receiver, administrator, administrative receiver,  compulsory manager or other similar officer of the Borrower or a Subsidiary of the Borrower or any of its assets; or

(d)

enforcement of any Security over any assets of the Borrower or a Subsidiary of the Borrower,

17.6

Creditors' process

17.7

Unlawfulness

17.8

Repudiation

17.9

Material adverse change

17.10

Acceleration

(a)

cancel the Commitment whereupon it shall immediately be cancelled; and/or

(b)

declare that all or part of the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents, be immediately due and payable, whereupon they shall become immediately due and payable.

(c)

declare that the Loan be payable on demand, whereupon it shall immediately become payable on demand by the Lender; and/or

(d)

exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.

18.

CHANGES TO THE PARTIES

(a)

The Lender may assign or transfer any of its rights and/or obligations under the Finance Documents to any other person.

(b)

The Borrower may not assign or transfer any of its rights and/or obligations under the Finance Documents, except with the prior written consent of the Lender.

19.

PAYMENT MECHANICS

19.1

Payments to the Lender

19.2

No set-off by the Borrower

19.3

Business Days

(a)

Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

(b)

During any extension of the due date for payment of any principal under paragraph (a) above, interest is payable on the principal at the rate payable on the original due date.

19.4

Currency of account

(a)

Subject to paragraphs (b) and (c) below, U.S. Dollar is the currency of account and payment for any sum due from the Borrower under any Finance Document.

(b)

Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

(c)

Any amount expressed to be payable in a currency other than U.S. Dollar shall be paid in that other currency.

19.5

Partial payments

(a)

If a payment received or recovered by the Lender under or in connection with any Finance Document is insufficient to discharge all the amounts then due and payable by the Borrower under the Finance Documents, such payment shall be applied by the Lender towards the obligations of the Borrower under the Finance Documents in the following order:

(i)

first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Lender under the Finance Documents;

(ii)

secondly, in or towards payment pro rata of any accrued interest (other than as provided in (i) above) due but unpaid under this Agreement;

(iii)

thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and

(iv)

fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.

(b)

The Lender may at any time at its discretion vary the order set out in paragraph (a) above.

(c)

Paragraphs (a) and (b) above will override any appropriation made by the Borrower.

20.

SET-OFF

21.

NOTICES

21.1

Communications in writing

21.2

Addresses

(a)

in the case of the Borrower, that identified with its name on the signature page below; and

(b)

in the case of the Lender, that identified with its name on the signature page below,

21.3

Delivery

(a)

Subject to paragraph (b) below, any communication or document made or delivered by one person to another under or in connection with the Finance Documents will be effective:

(i)

if by way of fax, only when received in legible form; or

(ii)

if by way of letter, only when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address;

(iii)

if by way of email, one hour after the time it was sent to the email address referred to in Clause 21.2.

(b)

Any communication or document to be made or delivered to a Party will be effective only when actually received by that Party and then only if it is expressly marked for the attention of the department or officer identified with that applicable Party's signature below (or any substitute department or officer as that relevant Party shall specify for this purpose).

21.4

English language

(a)

Any notice given under or in connection with any Finance Document must be in English.

(b)

All other documents provided under or in connection with any Finance Document must be:

(i)

in English; or

(ii)

if not in English, and if so required by the Lender, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

22.

CALCULATIONS AND CERTIFICATES

22.1

Accounts

22.2

Certificates and determinations

22.3

Day count convention

23.

PARTIAL INVALIDITY

24.

REMEDIES AND WAIVERS

25.

AMENDMENTS AND WAIVERS

26.

COUNTERPARTS

27.

GOVERNING LAW

28.

ENFORCEMENT

(a)

The courts of Hong Kong have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement) (a “Dispute”).

(b)

The Parties agree that the courts of Hong Kong are the most appropriate  and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

(c)

This Clause 28 is for the benefit of both Parties.  As a result, each Party shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, each Party may take concurrent proceedings in any number of jurisdictions.

1.

The Borrower

(a)

A copy of the constitutional documents of the Borrower, amended in a manner satisfactory to the Lender.

(b)

A copy of a resolution of the board of directors of the Borrower:

(i)

approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute the Finance Documents;

(ii)

authorising a specified person or persons to execute the Finance Documents on its behalf; and

(iii)

authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including the Utilisation Request) to be signed and/or despatched by it under or in connection with the Finance Documents.

(c)

A specimen of the signature of each person authorised by the resolutions referred to in paragraph (b) above.

(d)

A copy of a unanimous resolution of all the holders of the issued shares in the Borrower, approving the execution and the terms of, and the transactions contemplated by, the Finance Documents.

(e)

A certificate from the Borrower (signed by a director) confirming that borrowing the Commitment would not cause any borrowing or similar limit binding on it to be exceeded.

(f)

A certificate of an authorised signatory of the Borrower certifying that each copy document relating to it specified in this Schedule 1 (Conditions Precedent) is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

2.

Other documents and evidence

1.

We refer to the Facility Agreement.  This is a Utilisation Request.  Terms defined in the Facility Agreement shall have the same meaning in this Utilisation Request.

2.

We wish to borrow the Loan on the following terms:

3.

We confirm that each condition specified in Clause 4.2 (Further conditions precedent) is satisfied on the date of this Utilisation Request.

4.

The proceeds of the Loan should be credited direct to [account].

5.

This Utilisation Request is irrevocable.