[Translation of Chinese original]
Exhibit 10.16
SHARE PLEDGE AGREEMENT
This Share Pledge Agreement ("this Agreement") is entered into on March 31, 2004
in Beijing by and between the following parties:
PLEDGEE: KONGZHONG INFORMATION TECHNOLOGY (BEIJING) CO., LTD (KONGZHONG
BEIJING)
And
PLEDGORS: XXXXXX XXXX, XXXX XXXXX (THE PLEDGORS)
WHEREAS,
1. The Pledgors, Xxxxxx Xxxx and Xxxx Xxxxx, are citizens of the People's
Republic of China ("PRC", excluding Hong Kong Special Administration
District, Macao Special Administration District and Taiwan area, for
the purpose of this Agreement), and each of Xxxxxx Xxxx and Xxxx Xxxxx
respectively owns 50% equity interest in Beijing Boya Wuji Technologies
Co., Ltd. ("Beijing Boya Wuji").
2. Beijing Boya Wuji is a limited liability company registered in Beijing
engaging in the business of Internet information provision services,
value-added telecommunication services, etc.
3. 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 computer software products, internet products
development, sale and services of own products, etc. The Pledgee and
the Pledgors-owned Beijing Boya Wuji entered into Exclusive Technical
Consulting and Services Agreement, [Trademark Licensing Agreement] and
Domain Name Licensing Agreement on March 31, 2004.
4. In order to make sure that the Pledgee collect technical service fees
under Exclusive Technical Consulting and Services Agreement, [Trademark
Licensing Agreement] and Domain Name Licensing Agreement from
Pledgors-owned Beijing Boya Wuji, the Pledgors are willing to severally
and jointly pledge all their equity interest in Beijing Boya Wuji to
the Pledgee as a security for the Pledgee to collect the
above-mentioned fees.
In order to define each Party's rights and obligations, the Pledgee and
the Pledgors
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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 the 100% equity interests in Beijing
Boya Wuji legally and jointly held by the Pledgors and all the
present and future rights and benefits based on such equity
interest.
1.3 Service Agreement means the Exclusive Technical Consulting and
Services Agreement entered into by and between Beijing Boya
Wuji and the Pledgee on March 31, 2004.
1.4 Licensing Agreement means the Trademark Licensing Agreement
and Domain Name Licensing Agreement entered into by and
between Beijing Boya Wuji and the Pledgee on March 31, 2004.
1.5 Event of Default means any event in accordance with Article 7
hereunder.
1.6 Notice of Default means the notice of default issued by the
Pledgee in accordance with this Agreement.
2. PLEDGE
2.1 The Pledgors agree to pledge all their Equity Interest in
Beijing Boya Wuji to the Pledgee to ensure the Pledgee collect
the services fees under the Service Agreement.
2.2 The Pledge under this Agreement refers to all the fees
(including legal fees), expenses and losses that Beijing Boya
Wuji shall pay to the Pledgee under the Service Agreement and
Licensing Agreement, and the civil liability to the Pledgee
that Beijing Boya Wuji shall bear in case the Service
Agreement and/or Licensing Agreement wholly or partially
nullify due to any reason.
2.3 The Pledge under this Agreement refers to the rights owned by
the Pledgee who shall be entitled to have priority in
receiving payment by evaluation, or proceeds from the auction,
or sale of the Equity Interest pledged by the Pledgors to the
Pledgee.
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2.4 Unless otherwise agreed in written by the Pledgee after the
execution of this Agreement, the pledge under this Agreement
shall be terminated only upon Beijing Boya Wuji's full
performance of all its obligations and liabilities under the
Servicing Agreement and Licensing Agreement and subject to
written consent by the Pledgee. If Beijing Boya Wuji does not
fully perform all or part of its obligations or liabilities
under the Servicing Agreement and Licensing Agreement upon
expiration of such agreements, the Pledgee shall maintain the
Pledge hereunder up to the date all such obligations and
liabilities are fully performed.
3. EFFECT
3.1 This Agreement shall take effect as of the date when the
equity shares pledged are recorded in the Name List of
Shareholders of Beijing Boya Wuji.
3.2 The Pledgee is entitled to dispose the pledge hereunder if
Beijing Boya Wuji fails to pay the fees in accordance with the
Servicing Agreement and Licensing Agreement during the Pledge.
4. PHYSICAL POSSESSION OF DOCUMENTS
4.1 During the term of Pledge under this Agreement, the Pledgors
shall deliver the physical possession of the Certificate of
Distribution (original) of Beijing Boya Wuji and provide the
evidence of the proper record of such Pledge on the Name List
of Shareholders of Beijing Boya Wuji to the Pledgee within one
week as of the date of execution of this Agreement.
4.2 The Pledgors shall be entitled to collect the incomes (such
as, including but not limited to, any dividends and profits)
from the Equity Interest, which shall become the assurance for
the debt of Beijing Boya Wuji, within the term of this
Agreement, except for written consent of the Pledgee.
5 WARRANTIES AND REPRESENTATION OF THE PLEDGORS
The Pledgors hereby make the following representation and warranties to the
Pledgee and confirm that the Pledgee execute such Agreement in reliance of such
representation and warranties:
5.1 The Pledgors are the legal owner of the Equity Interest
hereunder and are entitled to create pledge on such shares;
5.2 The Pledgee shall not be interfered by any others at any time
once the Pledgee exercises the rights of the Pledge in
accordance with this Agreement.
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5.3 The Pledgee shall be entitled to exercise the Pledge in
accordance with relevant laws and this Agreement.
5.4 The execution and performance of this Agreement by the
Pledgors has gained all necessary authorization and shall not
violate any applicable laws and regulations. The
representative who signs this Agreement shall be lawfully and
effectively authorized.
5.5 Except the Pledge hereunder, the Equity Interest owned by the
Pledgors shall not burden any other liabilities (including but
not limited to pledge).
5.6 The Pledgors warrant that there is no on-going civil,
administrative or criminal litigation or administrative
punishment or arbitration related with the Equity Interest
hereunder and have no idea about those in future at the date
of execution of this Agreement.
5.7 There are no outstanding taxes, fees or unfinished legal
procedures related with the Equity Interest hereunder at the
date of execution of this Agreement.
5.8 Each stipulation hereunder is the expression of the Pledgors'
true intention and shall be binding upon to the Pledgors.
6 COVENANT OF THE PLEDGORS
6.1 During the effective term of this Agreement, the Pledgors
covenant to the Pledgee that the Pledgors shall:
6.1.1 not transfer the Equity Interest, create or permit to
create any pledges which may have an adverse effect
on the rights or benefits of the Pledgee without
prior written consent from the Pledgee except for
transfer to the Pledgee or the person designated by
the Pledgee as required by the Pledgee;
6.1.2 comply with and implement relevant laws and
regulations, present to the Pledgee the notices,
orders or suggestions with respect to the Pledge
issued or made by the competent authority within five
days upon receiving such notices, orders or
suggestions and take actions in accordance with the
reasonable instruction of the Pledgee;
6.1.3 timely notify the Pledgee of any events or any
received notices which may affect the Pledgors'
Equity Interest or any part of its
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right, and any events or any received notices which
may change the Pledgors' any covenant and obligation
under this Agreement or which may affect the
Pledgors' performance of its obligations under this
Agreement, take actions in accordance with the
reasonable instruction of the Pledgee;
6.2 The Pledgors agrees that the Pledgee's right of exercising the
Pledge obtained from this Agreement shall not be suspended or
hampered by the Pledgors or any successors of the Pledgors or
any person authorized by the Pledgors or any other person.
6.3 The Pledgors 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 and
the licensing fees under the Licensing Agreement, the Pledgors
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 another party designated by the Pledgee,
and provides the Pledgee with all the documents regarded as
necessary to the Pledgee within the reasonable time.
6.4 The Pledgors warrants to the Pledgee that the Pledgors will
comply with and perform all the guarantees, covenants,
agreements, representations and conditions for the benefits of
the Pledgee. The Pledgors shall compensate for all the losses
suffered by the Pledgee for the reasons that the Pledgors does
not perform or fully perform their guarantees, covenants,
agreements, representations and conditions.
7 EVENT OF DEFAULT
7.1 The following events shall be regarded as an event of default:
7.1.1 Beijing Boya Wuji or its successor or trustee fails
to make full payment of service fees or licensing
fees under the Servicing Agreement and Licensing
Agreement as scheduled there under;
7.1.2 The Pledgors makes any material misleading or
fraudulent representations or warranties under
Article 5 herein, and/or the Pledgors is in violation
of any warranties under Article 5 herein;
7.1.3 The Pledgors violates the warrants under Article 5
and the covenants under Article 6 herein;
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7.1.4 The Pledgors seriously violates any terms and
conditions herein;
7.1.5 The Pledgors waives the pledged Equity Interest or
transfers or assigns the pledged Equity Interest
without prior written consent from the Pledgee except
otherwise agreed under Article 6.1.1 herein;
7.1.6 The Pledgors' 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 Pledgors'
capacity to perform the obligations herein is
affected;
7.1.7 The Pledgors is incapable of repaying the general
debt or other debt;
7.1.8 This Agreement is illegal for the reason of the
promulgation of any related laws or the Pledgors'
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 Pledgors is adversely changed and
cause the Pledgee to deem that the capability of the
Pledgors to perform the obligations herein is
affected;
7.1.11 Other circumstances whereby the Pledgee is incapable
of exercising the right to dispose the Pledge in
accordance with the related laws.
7.2 The Pledgors shall immediately give a written notice to the
Pledgee if the Pledgors are 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 Pledgors and require the
Pledgors to immediately make full payment of the outstanding
fees under the Service Agreement and the Licensing Agreement,
and other payables or exercise the Pledge in accordance with
Article 8 herein.
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8 EXERCISE OF THE RIGHT OF THE PLEDGE
8.1 The Pledgors shall not transfer or assign the pledge without
prior written approval from the Pledgee prior to the full
repayment of the fees under the Service Agreement and the
Licensing Agreement.
8.2 The Pledgee shall give a notice of default to the Pledgors
when the Pledgee exercises the right of pledge.
8.3 Subject to Article 7.3, the Pledgee may exercise the right to
exercise the Pledge at any time or after 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 share pledged herein in accordance with
legal procedure until the outstanding fees under the Servicing
Agreement and the Licensing Agreement and all other payables
there under are repaid.
8.5 The Pledgors shall not hinder the Pledgee from exercising the
Pledge in accordance with this Agreement and shall give
necessary assistance so that the Pledgee could perfect his
Pledge.
9 TRANSFER OR ASSIGNMENT
9.1 The Pledgors shall not assign or transfer his rights and/or
obligations to any third party herein without prior consent
from the Pledgee.
9.2 This Agreement shall be binding upon the Pledgors 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 and/or the Licensing
Agreement to any third party 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 and/or the
Licensing Agreement, at the request of the Pledgee, the
Pledgors 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 reexecute a
pledge contract.
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10 TERMINATION
This Agreement shall not be terminated until the fees under the Service
Agreement and the Licensing Agreement are paid off and Beijing Boya Wuji will
not undertake any obligations under the Service Agreement and the Licensing
Agreement any more, and the Pledgee shall cancel or terminate this Agreement
within reasonable time as soon as practicable.
11 FEES AND OTHER CHARGES
11.1 The Pledgors 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 Pledgors shall fully
indemnify such taxes paid by the Pledgee.
11.2 The Pledgors 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 exercising of Pledge) incurred by
the Pledgors for the reason that (1) The Pledgors 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 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, geographic change, 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 Party affected by
Force Majeure who claims for exemption from performing any
obligations under this Agreement or under any Article herein
shall promptly 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
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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 APPLICABLE LAW AND DISPUTE RESOLUTION
13.1 The execution, validity, performance and interpretation of
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 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.
13.3 Each Party shall continue performance of this Agreement in
good faith according to the stipulations herein except the
matters in dispute.
14 NOTICE
Any notice or correspondence, which is given by the Party as stipulated
hereunder, shall be in Chinese and English writing and shall be delivered in
person or by registered or prepaid mail or recognized express service, or be
transmitted by facsimile to the following addresses:
PLEDGEE: KONGZHONG INFORMATION TECHNOLOGY (BEIJING) CO. LTD
Registered Address: Room 809, Tower A, Xxx Xxx Building, Xxx Xxx North
Street, Xi Cheng District, Beijing
Fax: (00) 00-00000000
Tele:(00) 00-00000000
Addressee: Xxxxxx Xxxx
XXXXXX XXXX
Address: Room 00X, Xx.0 Xxxxxxxx, Xxxx Xxxxx Xxx Xxxx, Xx Xxxx, Hai
Xxxx District, Beijing
Fax:
Tele:
Addressee: Xxxxxx Xxxx
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XXXX XXXXX
Address: Room 00X, Xx.0 Xxxxxxxx, Xxxx Xxxxx Xxxxx Xxxxxx, Xx Xxxx, Hai
Xxxx District, Beijing
Fax:
Tele:
Addressee: Xxxx Xxxxx
15 APPENDICES
The appendices to this Agreement are entire and integral part of this Agreement.
16 WAIVER
The Pledgee's non-exercise or delay in exercise of any rights, remedies, power
or privileges hereunder shall not be deemed as the waiver of such rights,
remedies, power or privileges. Any single or partial exercise of the rights,
remedies, power and privileges shall not exclude the Pledgee from exercising any
other rights, remedies, power and privileges. The rights, remedies, power and
privileges hereunder are accumulative and shall not exclude the application of
any other rights, remedies, power and privileges stipulated by laws.
17 MISCELLANEOUS
17.1 Any amendments, modifications or supplements to this Agreement
shall be in writing and come into effect upon being executed
and sealed by the parties hereto.
17.2 In case any terms and stipulations in this Agreement is
regarded as illegal or can not be performed in accordance with
the applicable law, such terms and stipulations shall be
deemed to lose effect and enforcement within the scope
governed by the applicable law, and the rest stipulations will
remain effective.
17.3 This Agreement is written in Chinese and there are 5 original
copies.
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PLEDGEE: KONGZHONG INFORMATION TECHNOLOGY (BEIJING) CO., LTD.
Authorized Representative: /s/ Xxxx Xxxx
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PLEDGORS: XXXXXX XXXX
Signature: /s/ Xxxxxx Xxxx
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PLEDGORS: XXXX XXXXX
Signature: /s/ Xxxx Xxxxx
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APPENDICES
1. Name List of Shareholders of Beijing Boya Wuji Technologies Co., Ltd.
2. Certificate of Capital Contribution of Beijing Boya Wuji Technologies
Co., Ltd.
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