Share Pledge Agreement (2004)Full Document 

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Share Pledge Agreement

 

Pursuant to the Acquisition Agreement dated as of July 27, 2004 by and between AsiaInfo Holdings, Inc., a Delaware corporation (“AsiaInfo”) and Lenovo Group Limited, a Hong Kong corporation (“LGL”) (the “Acquisition Agreement”), and as supplemented and amended by Supplement and Amendment No.1 to Acquisition Agreement, dated as of October 1, 2004, by and between AsiaInfo and LGL (the “Supplement”; the Acquisition Agreement, as supplemented and amended by the Supplement, shall be referred to herein as the “Amended Acquisition Agreement”), this Share Pledge Agreement (this “Agreement”) has been executed by and among the following parties on October 19, 2004 in Beijing. In the event of any inconsistencies between the Amended Acquisition Agreement and this Agreement, the provisions of the Amended Acquisition Agreement shall prevail.

 

Party A: Lenovo-AsiaInfo Technologies, Inc. (hereinafter “Pledgee”)

 

Address:   

4/F Zhongdian Information Tower, No.6 Zhongguancun South

Street, Haidian District, Beijing 100086, P.R. China

 

Party B: Lenovo Manufacturing Limited (hereinafter “Pledgor “)

 

Address:   

P.O. Box 71, Craigmuir Chambers, Road Town, Tortola, British

Virgin Islands

 

Party C: Lenovo Computer System and Technology Service Limited. (hereinafter “Party C”)

 

Address:   

No. 6 Chuangye Road, Shangdi, Haidian District, Beijing 100085,

P.R. China

 

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Whereas:

 

1. Pledgor is a company duly organized and existing under the laws of the British Virgin Islands (hereinafter referred to as “BVI”), and holds 25% of the equity interest in Party C. Party C is a limited liability company registered in Beijing, the People’s Republic of China (hereinafter referred to as “China”) and duly organized and existing under the laws of China engaging in information technology related business.

 

2. Pledgee is a wholly-foreign-owned enterprise registered in Beijing, China and duly organized and existing under the laws of China. Pledgee and Party C have executed a Business Cooperation Agreement (as defined below);

 

3. Pledgor hereby pledges all of its equity interest in Party C to Pledgee as security for all payments due and payable by Party C to Pledgee, including without limitation, the consulting and service fees under the Business Cooperation Agreement.

 

4. Party C intends to acknowledge the respective rights and obligations of Pledgor and Pledgee under this Agreement, and to provide any necessary assistance in registering the Pledge;

 

Therefore, the Parties have mutually agreed to execute this Agreement upon the following terms.

 

1. Definitions

 

Unless otherwise provided for in this Agreement, the terms below shall have the following meanings:

 

  1.1 “Pledge” shall refer to the security interest granted by Pledgor to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to be compensated on a preferential basis upon the conversion, auction or sale of the Equity Interest.

 

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  1.2 “Equity Interest” shall refer to all of the equity interest in Party C which is currently lawfully held by or to be acquired by Pledgor.

 

  1.3 “Term of Pledge” shall refer to the term set forth in Section 3.2 of this Agreement.

 

  1.4 “Business Cooperation Agreement” shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C (which is partially owned by Pledgor) and Pledgee on October 19, 2004.

 

  1.5 “Event of Default” shall refer to any of the circumstances set forth in Article 7 of this Agreement.

 

  1.6 “Notice of Default” shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.

 

2. The Pledge

 

As security for the prompt and complete performance of all or any part of the payments due and payable by Party C to Pledgee (whether by virtue of maturity, acceleration or otherwise), including without limitation the consulting and services fees, under the Business Cooperation Agreement, Pledgor hereby agrees to pledge and pledges the Equity Interest in Party C which is currently lawfully held by or to be acquired by Pledgor, to Pledgee.

 

3. Term of the Pledge

 

  3.1 This Agreement shall become effective as of the date when this Agreement is approved by the governmental authority authorized by the Ministry of Commerce of the People’s Republic of China. The Pledge shall be continuously valid until all payment obligations under the Business Cooperation Agreement have been fulfilled by Party C. The parties agree that Party C shall, within 10 business days following the execution of this Agreement, complete the related government approval and filing procedure of the Pledge, and shall register the Pledge in the Shareholders’ Register of Party C.

 

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  3.2 During the term of the Pledge, in the event Party C fails to pay the consulting or service fees in accordance with the Business Cooperation Agreement to Pledgee, Pledgee shall have the right, but not the obligation, to dispose of the Equity Interest in accordance with the provisions of this Agreement.

 

4. Custody of Pledge Records

 

  4.1 Upon the registration of the Pledge in the Shareholders’ Register of Party C, Pledgor shall deliver to Pledgee’s custody the capital contribution certificate for the Equity Interest and the Shareholders’ Register of Party C. Pledgee shall have custody of such records during the entire term of the Pledge set forth in this Agreement.

 

  4.2 Pledgee shall have the right to collect dividends generated by the Equity Interest during the term of the Pledge.

 

5. Representations and Warranties of Pledgor

 

  5.1 Pledgor is the sole legal and beneficial owner of the Equity Interest.

 

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