Exhibit 10.88
Equity Interests Pledge Agreement
This Equity Interests Pledge Agreement (the "Agreement") is entered into on the
day of August 15, 2004 by and between the following parties:
Pledgee: Hurray! Times Communications (Beijing) Ltd.
Address:
Pledgor: Xxxx Xxxxxxxx
ID Card No.: 440112611107062
Address: Xxxx 0, Xx. 00 Xxxxxx, 000 Xxxxxxxxxxxxxx, Guangzhou
WHEREAS,
1. Xxxx Xxxxxxxx, the Pledgor, is a citizen of the People's Republic of China
("PRC"). The Pledgor owns 50% of the equity interest in Beijing Enterprise
Network Technology Co., Ltd. Beijing Enterprise Network Technology Co.,
Ltd. is a limited liability company registered in Beijing, PRC 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 engage in the
business of technology development, software production, integrated system
and technical services. The Pledgee and Beijing Enterprise Network
Technology Co., Ltd. owned by the Pledgor enter into Exclusive Technical
Consulting and Services Agreement (the "Service Agreement") on August 15,
2004.
3. In order to make sure that the Pledgee collects technical consulting and
service fees as normal from Beijing Enterprise Network Technology Co.,
Ltd., the Pledgor is willing to pledge all its equity interest in Beijing
Enterprise Network Technology Co., Ltd. to the Pledgee as a security for
the Pledgee to collect technical consulting and service fees under the
Service Agreement.
In order to implement the terms of the service agreement, the Pledgee and
the Pledgor through mutual negotiations hereby enter into this Agreement
based upon the following terms:
1. Definitions
Unless otherwise provided in this Agreement, the following terms shall have the
following meanings:
1.1 Pledge means the full content of Article 2 hereunder
1.2 Equity Interest means all its 50% equity interests in Beijing
Enterprise Network Technology Co., Ltd. legally held by the Pledgor.
1.3 Rate of Pledge means the ratio between the value of the equity
interest pledged under this Agreement and the technical consulting and
service 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 Beijing Enterprise Network
Technology Co., Ltd. and the Pledgee.
1.6 Event of Default means any event under Article 7 hereof.
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 Beijing
Enterprise Network Technology Co., Ltd. to the Pledgee as guarantee
for the technical consulting and 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 arising
from conversion of the equity interests pledged by the Pledgor to the
Pledgee into money or auction or sale of the equity interests.
3. Rate 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
2
in the Register of Member of Beijing Enterprise Network
Technology Co., Ltd. and registered with 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 of the right to the Pledge in accordance with this
Agreement in the event that Beijing Enterprise Network Technology
Co., Ltd. fails to pay technical Consulting and service fee in
accordance with the Service Agreement.
4. Physical Possession of Pledge Documents
4.1 The Pledgee shall be entitled to receive 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 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 of or assign the right to the pledge in accordance with
this Agreement.
5.4 The Pledgor does not pledge the equity interests to any other person
except for the Pledgee.
6. Undertaking of the Pledgor
6.1 During the effective term of this Agreement, the Pledgor undertakes to
the Pledgee that the Pledgor shall:
6.1.1 Except for the transfer of equity interest by the Pledgor to
the party designated by Hurray! Holding Co., Ltd. pursuant to the
Contract Relating to the Exclusive Purchase Right of Equity
Interest entered into among the Pledgor,
3
Hurray! Holding Co., Ltd. and Beijing Enterprise Network
Technology Co., Ltd., not transfer or assign
the equity interests, create or permit to be created any pledges
which may have an effect on the rights or benefits of the
Pledgee without prior written consent from the Pledgee;
6.1.2 Comply with and implement all laws and regulations with respect
to the pledge of rights, present to the Pledgee the notices,
orders or suggestions with respect to the right to 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 warranty 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 right 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/legal
entity) designed by the Pledgee, and provides all the notices, orders
and decisions regarded as necessary by the Pledgee to 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
4
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:
7.1.1 Beijing Enterprise Network Technology Co., Ltd. fails to make
full payment of the 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 representations and 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 because of
breach of contract; or (2) are due but cannot be repaid or
performed as scheduled and thereby cause the Pledgee to believe
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 becomes illegal or fails to perform its
obligations herein due to the promulgation of relevant laws;
7.1.9 Any approval, permits, licenses or authorization from the
competent authority of the government necessary for the
performance of this Agreement or legality or effectiveness of
this Agreement are withdrawn, suspended, invalidated or
materially amended;
5
7.1.10 The property of the Pledgor is adversely changed and causes the
Pledgee to believe that the capability of the Pledgor to perform
the obligations herein is affected;
7.1.11 The successors or custodian of the Pledgor are only entitled to
perform a portion of or refuse to perform the payment liability
under the Service Agreement;
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.
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 to 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 to 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 arising
from conversion of whole or part of the equity interests pledged
herein into money or auction or sale of the equity interests in
accordance with legal procedure until the outstanding technical
consulting and service fees and all other payables under the Service
Agreement are repaid.
6
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.
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 all or any of his rights and
obligations under the Service Agreement to any individual (natural
person / legal person) 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 change of Pledgee because of the transfer or assignment,
the new parties to the pledge shall reexecute 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 Beijing Enterprise Network
Technology Co., Ltd. will not undertake any obligations under the Service
Agreement any more, and the Pledgee shall cancel or terminate this Agreement
within reasonable time as soon as practicable.
11. Formalities Fees and other Charges
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
7
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 the
Pledgor fails to pay any payable taxes, fees or charges in accordance
with this Agreement; or 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 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, means any
unforeseen events beyond the reasonable control of a party and cannot
be prevented by the affected party even with reasonable care,
including without limitation acts of governments, acts of nature,
fire, explosion, geographical change, typhoon, flood, earthquake,
tide, lightning or war. However, any shortage of credit, capital or
finance shall not be regarded as an event beyond the reasonable
control of a party. The party affected by the Event of Force Majeure
who seeks 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 seeking 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, either party can submit such matter to China
International Economic and Trade Arbitration Commission ("CIETAC") for
arbitration in accordance with its arbitration rules currently in
force.
8
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, it shall be deemed
to have been served at the time when such notice actually reaches the
addressee; where such notice is transmitted by telex or facsimile, it
shall be deemed to have been served at 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, it shall be
deemed to have been served on the next business day following such
day. The delivery place shall be 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, supplements, 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.
9
Equity Interests Pledge Agreement
(No text on this page)
The Pledgee: Hurray! Times Communications (Beijing) Ltd. (Seal affixed)
Authorized Representative: (Signed)
The Pledgor: Xxxx Xxxxxxxx
Signature: (Signed)
10
