Equity Interests Pledge Agreement - Hurray! Times Communications (Beijing) Ltd. and Xiang Songzuo
Equity Interests Pledge Agreement
This Equity Interests Pledge Agreement (the "Agreement") is entered into on the
day of May 5, 2004 by and between the following parties:
Pledgee: Hurray! Times Communications (Beijing) Ltd.
Address: Room B 07-A, Tong Heng Plaza, No.4 Huanyuan Road, Haidian
District, Beijing
Pledgor: Xiang Songzuo
Identity Code: 110108650128011
Address: 502 Building 29, Fumin Xincun, Futian District, Shenzhen City,
Guangdong Province
WHEREAS,
1. Xiang Songzuo, the Pledgor, is the citizen of the People's Republic of
China ("PRC"). The Pledgor owns 15% of the equity interest in Hurray!
Solutions Ltd. ("Hurray Solutions") is a company registered in Beijing
carrying on value added telecommunication business.
2. The Pledgee, a wholly foreign-owned company registered in Beijing, PRC, has
been licensed by the PRC relevant government authority to carry on the
business of technical service on software development, software production,
and system integration. The Pledgee and the Pledgor-owned Hurray Solutions
enter into Exclusive Technical Consulting and Services Agreement (the
"Service Agreement") on May 5, 2004.
3. In order to make sure that the Pledgee collect technical service fees as
normal from Hurray Solutions, the Pledgor is willing to pledge all its
equity interest in Hurray Solutions to the Pledgee as a security for the
Pledgee to collect technical consulting and service fees under the Service
Agreement.
In order to define each Party's rights and obligations, the Pledgee and the
Pledgor through mutual negotiations hereby enter into this Agreement based
upon the following terms:
1. Definitions and Interpretations
Unless otherwise provided in this Agreement, the following terms shall have the
following meanings:
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1.1 Pledge means the entire content of Article 2 hereunder
1.2 Equity Interest means all its 15% equity interests in Hurray Solutions
legally held by the Pledgor.
1.3 Rate of Pledge means the ratio between the value of the pledge under
this Agreement and the technical consulting fees under the Service
Agreement.
1.4 Term of Pledge means the period provided for under Article 3.2
hereunder.
1.5 Service Agreement means the Exclusive Technical Consulting and Service
Agreement entered into by and between Hurray Solutions and the
Pledgee.
1.6 Event of Default means any event in accordance with Article 7
hereunder.
1.7 Notice of Default means the notice of default issued by the Pledgee in
accordance with this Agreement.
2. Pledge
2.1 The Pledgor agrees to pledge all its equity interest in Hurray
Solutions to the Pledgee as guarantee for the technical consulting
service fee payable to the Pledgee under the Service Agreement.
2.2 Pledge under this Agreement refers to the rights owned by the Pledgee
who shall be entitled to have priority in receiving payment by the
evaluation or proceeds from the auction or sale of the equity
interests pledged by the Pledgor to the Pledgee.
3. Rate of Pledge and Term of Pledge
3.1 The rate of Pledge
3.1.1 The rate of pledge shall be 100%.
3.2 The term of Pledge
3.2.1 The Pledge of equity interests under this Agreement shall take
effect as of the date when the equity interests under this
Agreement are recorded in the Register of Shareholder of Hurray
Solutions and registered with
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the competent Administration for Industry and Commerce. The term
of the Pledge is the same as the term of Service Agreement.
3.2.2 During the term of the Pledge, the Pledgor shall be entitled to
dispose the Pledge in accordance with this Agreement in the event
that Hurray Solutions fails to pay exclusive technical Consulting
and service fee in accordance with the Service Agreement.
4. Physical Possession of Documents
4.1 The Pledgee shall be entitled to collect the dividends from the equity
interests.
5. Warranties and Representations of the Pledgor
5.1 The Pledgor is the legal owner of the equity interests.
5.2 Except as otherwise provided hereunder, The Pledgee shall not be
interfered with by any parties at any time when the Pledgee exercises
its rights in accordance with this Agreement.
5.3 Except as otherwise provided hereunder, The Pledgee shall be entitled
to dispose or assign the pledge in accordance with this Agreement.
5.4 The Pledgor will not pledge or encumber the equity interests to any
other person except for the Pledgee.
6. Covenant of the Pledgor
6.1 During the effective term of this Agreement, the Pledgor covenants to
the Pledgee that the Pledgor shall:
6.1.1 Except the transfer of equity interest by the Pledgor, as
subject to the Exclusive Purchase Right Contract entered into
among the Pledgor, Hurray! Holding Co., Ltd. and Hurray
Solutions, to Hurray! Holding Co., Ltd. or the person designated
by Hurray! Holding Co., Ltd., not transfer or assign the equity
interests, create or permit to be created any pledges which may
have an adverse effect on the rights or benefits of the Pledgee
without prior written consent from the Pledgee;
6.1.2 Comply with and implement laws and regulations with respect to
the pledge of rights, present to the Pledgee the notices, orders
or
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suggestions with respect to the Pledge issued or made by the
competent authority within five days upon receiving such notices,
orders or suggestions and comply with such notices, orders or
suggestions, or object to the foregoing matters at the reasonable
request of the Pledgee or with consent from the Pledgee.
6.1.3 Timely notify the Pledgee of any events or any received notices
which may affect the Pledgor's equity interest or any part of its
right, and any events or any received notices which may change
the Pledgor's any covenant and obligation under this Agreement or
which may affect the Pledgor's performance of its obligations
under this Agreement.
6.2 The Pledgor agrees that the Pledgee's to exercise the Pledge obtained
from this Agreement shall not be suspended or hampered through legal
procedure by the Pledgor or any successors of the Pledgor or any
person authorized by the Pledgor.
6.3 The Pledgor warrants to the Pledgee that in order to protect or
perfect the security over the payment of the technical consulting and
service fees under the Service Agreement, the Pledgor shall execute in
good faith and cause other parties who have interests in the pledge to
execute all the title certificates, contracts, and or perform and
cause other parties who have interests to take action as required by
the Pledgee and make access to exercise the rights and authorization
vested in the Pledgee under this Agreement, and execute all the
documents with respect to the changes of certificate of equity
interests with the Pledgee or the person(natural person or legal
entity) designed by the Pledgee, and provides all the notices, orders
and decisions regarded as necessary by the Pledgee with the Pledgee
within the reasonable time.
6.4 The Pledgor warrants to the Pledgee that the Pledgor will comply with
and perform all the guarantees, covenants, agreements, representations
and conditions for the benefits of the Pledgee. The Pledgor shall
compensate all the losses suffered by the Pledgee for the reasons that
the Pledgor does not perform or fully perform their guarantees,
covenants, agreements, representations and conditions.
7. Events of Default
7.1 The following events shall be regarded as the event of default:
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7.1.1 Hurray Solutions fails to make full payment of the exclusive
technical consulting and service fees as scheduled under the
Service Agreement;
7.1.2 The Pledgor makes any material misleading or fraudulent
representations or warranties under Article 5 herein, and/or the
Pledgor is in violation of any warranties under Article 5 herein;
7.1.3 The Pledgor violates the covenants under Article 6 herein;
7.1.4 The Pledgor violates any terms and conditions herein;
7.1.5 The Pledgor waives the pledged equity interests or transfers or
assigns the pledged equity interests without prior written
consent of the Pledgee, except as provided in Article 6.1.1 in
this Agreement;
7.1.6 The Pledgor's any external loan, security, compensation,
covenants or any other compensation liabilities (1) are required
to be repaid or performed prior to the scheduled date; or (2) are
due but can not be repaid or performed as scheduled and thereby
cause the Pledgee to deem that the Pledgor's capacity to perform
the obligations herein is affected;
7.1.7 The Pledgor is incapable of repaying the general debt or other
debt;
7.1.8 This Agreement is illegal for the reason of the promulgation of
the related laws or the Pledgor's incapability of continuing to
perform the obligations herein;
7.1.9 Any approval, permits, licenses or authorization from the
competent authority of the government needed to perform this
Agreement or validate this Agreement are withdrawn, suspended,
invalidated or materially amended;
7.1.10 The property of the Pledgor is adversely changed and causes the
Pledgee to deem that the capability of the Pledgor to perform the
obligations herein is affected;
7.1.11 The successors or assignees of the Pledgor are only entitled to
perform a portion of or refuse to perform the payment liability
under the Service Agreement;
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7.1.12 Other circumstances whereby the Pledgee is incapable of
exercising the right to dispose the Pledge in accordance with the
related laws.
7.2 The Pledgor shall immediately give a written notice to the Pledgee if
the Pledgor is aware of or find that any event under Article 7.1
herein or any events that may result in the foregoing events have
happened or is going on.
7.3 Unless the event of default under Article 7.1 herein has been solved
to the Pledgee's satisfaction, the Pledgee, at any time when the event
of default happens or thereafter, may give a written notice of default
to the Pledgor and require the Pledgor to immediately make full
payment of the outstanding service fees under the Service Agreement
and other payables or dispose the Pledge in accordance with Article 8
herein.
8. Exercise of the Right of the Pledge
8.1 The Pledgor shall not transfer or assign the equity interests without
prior written approval from the Pledgee prior to the full repayment of
the consulting and service fee under the Service Agreement.
8.2 The Pledgee shall give a notice of default to the Pledgor when the
Pledgee exercises the right of pledge.
8.3 Subject to Article 7.3, the Pledgee may exercise the right to dispose
the Pledge at any time when the Pledgee gives a notice of default in
accordance with Article 7.3 or thereafter.
8.4 The Pledgee is entitled to have priority in receiving payment by the
evaluation or proceeds from the auction or sale of whole or part of
the equity interests pledged herein in accordance with legal procedure
until the outstanding technical consulting and service fees and all
other payables under the Service Agreement are repaid.
8.5 The Pledgor shall not hinder the Pledgee from disposing the Pledge in
accordance with this Agreement and shall give necessary assistance so
that the Pledgee could realize his Pledge.
9. Transfer or Assignment
9.1 The Pledgor shall not donate or transfer his rights and obligations
herein without prior consent from the Pledgee.
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9.2 This Agreement shall be binding upon the Pledgor and his successors
and be effective to the Pledgee and his each successor and assignee.
9.3 The Pledgee may transfer or assign his all or any rights and
obligations under the Service Agreement to any individual (natural
person or legal entity) at any time. In this case, the assignee shall
enjoy and undertake the same rights and obligations herein of the
Pledgee as if the assignee is a party hereto. When the Pledgee
transfers or assigns the rights and obligations under the Service
Agreement, at the request of the Pledgee, the Pledgor shall execute
the relevant agreements and/or documents with respect to such transfer
or assignment.
9.4 After the Pledgee's change resulting from the transfer or assignment,
the new parties to the pledge shall re-execute a pledge contract.
10. Termination
This Agreement shall not be terminated until the consulting and service fees
under the Service Agreement are paid off and the Hurray Solutions shall no
longer undertake any obligations under the Service Agreement. The Pledgee shall
then cancel or terminate this Agreement within reasonable time as soon as
practicable.
11. Formalities Fees and other Expenses
11.1 The Pledgor shall be responsible for all the fees and actual
expenditures in relation to this Agreement including but not limited
to legal fees, cost of production, stamp tax and any other taxes and
charges. If the Pledgee pays the relevant taxes in accordance with the
laws, the Pledgor shall fully indemnify such taxes paid by the
Pledgee.
11.2 The Pledgor shall be responsible for all the fees (including but not
limited to any taxes, formalities fees, management fees, litigation
fees, attorney's fees, and various insurance premiums in connection
with disposition of Pledge) incurred by the Pledgor for the reason
that (1) The Pledgor fails to pay any payable taxes, fees or charges
in accordance with this Agreement; or (2) The Pledgee has recourse to
any foregoing taxes, charges or fees by any means for other reasons.
12. Force Majeure
12.1 If this Agreement is delayed in or prevented from performing in the
Event of
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Force Majeure ("Event of Force Majeure"), only within the limitation
of such delay or prevention, the affected party is absolved from any
liability under this Agreement. Force Majeure, which includes acts of
governments, acts of nature, fire, explosion, typhoon, flood,
earthquake, tide, lightning, war, means any unforeseen events beyond
the prevented party's reasonable control and cannot be prevented with
reasonable care. However, any shortage of credit, capital or finance
shall not be regarded as an event beyond a Party's reasonable control.
The Pledge effected by Force Majeure who claims for exemption from
performing any obligations under this Agreement or under any Article
herein shall notify the other party of such exemption promptly and
advice him of the steps to be taken for completion of the performance.
12.2 The party affected by Force Majeure shall not assume any liability
under this Agreement. However, subject to the party affected by Force
Majeure having taken its reasonable and practicable efforts to perform
this Agreement, the Party claiming for exemption of the liabilities
may only be exempted from performing such liability as within
limitation of the part performance delayed or prevented by Force
Majeure. Once causes for such exemption of liabilities are rectified
and remedied, both parties agree to resume performance of this
Agreement with their best efforts.
13. Dispute Resolution
13.1 This Agreement shall be governed by and construed in accordance with
the PRC law.
13.2 The parties shall strive to settle any dispute arising from the
interpretation or performance, or in connection with this Agreement
through friendly consultation. In case no settlement can be reached
through consultation, each party can submit such matter to China
International Economic and Trade Arbitration Commission ("CIETAC") for
arbitration. The arbitration shall follow the current rules of CIETAC,
and the arbitration proceedings shall be conducted in Chinese and
shall take place in Beijing. The arbitration award shall be final and
binding upon the parties.
14. Notice
14.1 Any notice which is given by the parties hereto for the purpose of
performing the rights, duties and obligations hereunder shall be in
writing. Where such notice is delivered personally, the time of notice
is the time when such notice actually reaches the addressee; where
such notice is transmitted by telex or
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facsimile, the notice time is the time when such notice is
transmitted. If such notice does not reach the addressee on business
date or reaches the addressee after the business time, the next
business day following such day is the date of notice. The delivery
place is the address first written above of the parties hereto or the
address advised in writing including facsimile and telex from time to
time.
15. Effectiveness
15.1 This agreement and any amendments, modification, supplements,
additions or changes hereto shall be in writing and come into effect
upon being executed and sealed by the parties hereto.
15.2 This Agreement is executed in duplicate in Chinese.
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Equity Interests Pledge Agreement
(No text on this page)
By: /s/ Xiang Songzuo
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The Pledgee: Hurray! Times Communications (Beijing) Ltd.
Authorized Representative: Xiang Songzuo
The Pledgor: Xiang Songzuo
Signature:
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