EXHIBIT 10.20
EQUITY INTERESTS PLEDGE AGREEMENT
This Equity Interests Pledge Agreement (the "Agreement") is entered into on the
day of 27 November, 2003 by and between the following parties:
Pledgee: Shanghai Linktone Consulting Co., Ltd.
Address: F6, Ganglu Sqhare, Xizang middle Road, Shanghai
Pledgor: Hu Ankai
Identity Code: 3101027101188043
Address: Xx.00, Xxxx 0000, Xxxxxxxx Xxxx, Xxxxxxxx
WHEREAS,
1. Hu Ankai, the Pledgor, is the citizen of the People's Republic of China
("PRC"). The Pledgor owns 50% of the equity interest in Shanghai Weilan
Computer Co., Ltd. ("Shanghai Weilan") is a limited liability company
registered in Shanghai carrying on value added telecummunication business.
2. The Pledgee, a wholly foreign-owned company registered in Shanghai, PRC,
has been licensed by the PRC relevant government authority to carry on the
business of Internet technical service. The Pledgee and the Pledgor-owned
Shanghai Weilan Computer Co., Ltd enter into Exclusive Technical
Consulting and Services Agreement (the " Service Agreement").
3. In order to make sure that the Pledgee collect technical service fees as
normal from Shanghai Weilan , the Pledgor is willing to pledge all its
equity interest in Shanghai Weilan 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:
1.1 Pledge means the full content of Article 2 hereunder
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1.2 Equity Interest means all its 50% equity interests in Shanghai
Weilan legally held by the Pledgor.
1.3 Rate of Pledge means the ratio between the value of the pledge under
this Agreement and the exclusive 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 Shanghai Weilan 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. Assignment and Pledge
2.1 The Pledgor agrees to pledge all its equity interest in Shanghai
Weilan 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 shall take effect as of the date when the equity
interests under this Agreement are recorded in the Register of
Shareholder of Shanghai Weilan and registered with the
competent Administration for Industry and Commerce. The term
of the Pledge is the same with the
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term of Service Agreement.
3.2.2 During the Pledge, the Pledgor shall be entitled to dispose
the Pledge in accordance with this Agreement in the event that
Shanghai Weilan fails to pay exclusive technical Consulting
and service fee in accordance with the Service Agreement.
4. Physical Possession of Documents
4.1 During the term of Pledge under this Agreement, the Pledgor shall
deliver the physical possession of the Certificate of Distribution
and the Name List of Shareholder of Shanghai Weilan to the Pledgee
within one week as of the date of conclusion of this Agreement.
4.2 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 The Pledgee shall not be interfered by any parties at any time when
the Pledgee exercises its rights in accordance with this Agreement.
5.3 The Pledgee shall be entitled to dispose or assign the pledge in
accordance with this Agreement.
5.4 The Pledgor does 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, as subject to the
Exclusive Purchase Right Contract entered into among the
Pledgor, Linktone Ltd and Shanghai Weilan, to Linktone Ltd or
the person designated by Linktone Ltd, not transfer or assign
the equity interests, 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;
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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 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 right of exercising 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 or any other person.
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 Shanghai Weilan 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 cause
the Pledgee deem that the capability of the Pledgor to
perform the obligations herein is affected;
7.1.11 The successors or assignees of the Shanghai Weilan 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 pledge 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 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
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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 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 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 the Shanghai Weilan 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 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.
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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,
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 Pledgeeffected 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 Shanghai. 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
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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 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. Appendices
15.1 The appendices to this Agreement are entire and integral part of
this Agreement.
16. Effectiveness
16.1 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.
16.2 This Agreement is executed in both Chinese and English forms, and in
case of conflicts, the Chinese version shall prevail.
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The Pledgee: Shanghai Linktone Consulting Co., Ltd.
Authorized Representative: /s/ Xxx Xx
The Pledgor: Hu Ankai
Signature: /s/ Hu Ankai
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EXHIBIT A
1. Register of Shareholders of Shanghai Weilan Computer Co., Ltd.
2. Certificate of Capital Contribution of Shanghai Weilan Computer Co., Ltd
3. Exclusive Technical Consulting and Services Agreement
