EXHIBIT 10.31
OPERATING AGREEMENT
This Operating Agreement ("Agreement") is entered into on the day of 27
November, 2003 (the "Effective Date") among the following parties:
PARTY A: Shanghai Huitong Information Co., Ltd.
ADDRESS: Xx.00 Xxxxx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxxxxx
PARTY B: Shanghai Unilink Computer Co., Ltd.
ADDRESS: 154, Xx.0000, Xxxxx Xxxx, Xxxxxx Xxxxxxxx, Xxxxxxxx
PARTY C: Xxxx Xxx
XXXXXXX: 00X, Xx.0, Xxx Xxxxxx Xxxx Garden, Henan South Road, Shanghai
PARTY D: Du Minsheng
ADDRESS: Xxxx 000, Xx.00, Xxxx 000, Xxxxx Xxxx, Xxxxxxxx
PARTY E: Shanghai Weilan Computer Co., Ltd.
ADDRESS: Xx.000, Xxxxxxxxxxxxx Xxxx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxxxxx
WHEREAS:
1. Party A is a wholly foreign-owned enterprise registered in the People's
Republic of China (the "PRC");
2. Party B is a wholly domestic-owned company registered in the PRC;
3. Party A has established a business relationship with Party B by entering
into Exclusive Technical Consulting and Services Agreement;
4. Pursuant to Exclusive Technical Consulting and Services Agreement between
Party A and Party B, Party B shall pay a certain amount of money to Party
A. However, the relevant payables have not been paid yet and the daily
operation of Party B will have a material effect on its capacity to pay the
payables to Party A.
5. Party C is a shareholder of Party B who owns 5% equity in Party B.
6. Party D is a shareholder of Party B who owns 5% equity in Party B.
7. Party E is a shareholder of Party B who owns 90% equity in Party B.
8. Party A, Party B, Party C , Party D and Party E agree to further clarify
matters relating to the operation of Party B pursuant to provisions herein.
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NOW THEREFORE, Party A, Party B, Party C, Party D and Party E through
mutual negotiations hereby agree as follows:
1. In order to ensure Party B's normal operation, Party A agrees, subject to
Party B's satisfaction of the relevant provisions herein, to act as the
guarantor for Party B in the contracts, agreements or transactions in
association with Party B's operation between Party B and any other third
party and to provide full guarantee for Party B in performing such
contracts, agreements or transactions. Party B agrees to mortgage the
receivables of its operation and the company's whole asset to Party A as a
counter guarantee. Pursuant to the above guarantee arrangement, Party A, as
the guarantor for Party B, shall respectively enter into written guarantee
contracts with Party B's counter parties to assume the guarantee liability.
2. In consideration of the requirement of Article 1 herein and to ensure the
performance of the various operation agreements between Party A and Party B
and to ensure the payment of the various payables by Party B to Party A,
Party B together with its shareholders Party C Party D and Party E, hereby
jointly agree that Party B shall not conduct any transaction which may
materially affect its assets, obligations, rights or the company's
operation unless the obtainment of a prior written consent from Party A or
Party A's Affiliates, including without limitations to the following
contents:
2.1 To borrow money from any third party or assume any debt;
2.2 To sell to any third party or acquire from any third party any assets
or rights, including without limitations to any intellectual property
rights;
2.3 To provide real guarantee for any third party with its assets or
intellectual property rights;
2.4 To assign to any third party the agreements entered into by it.
3. In order to ensure the performance of the various operation agreements
between Party A and Party B and to ensure the payment of the various
payables by Party B to Party A, Party B together with its shareholders
Party C Party D and Party E hereby jointly agree to accept the provision of
the corporate policies and guidance by Party A at no time in respects of
appointment and dismissal of the company's employees, the company's daily
operation administration and the company's financial administrative system.
4. Party B together with its shareholders Party C, Party D and Party E, hereby
jointly agree that Party B, Party C ,Party D and Party E shall only appoint
the personnel recommended by Party A as the directors of Party B, and Party
B shall engage Party
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A's high ranking officers or any other candidate recommended by Party A as
Party B's General Manager, Chief Financial Officer, and other high ranking
officers. If any of the above officers leaves or is fired by Party A, he or
she will lose the qualification to undertake any positions in Party B and
Party B, Party C, Party D and Party E shall appoint other high officers of
Party A recommended by Party A to undertake such position.
Party B together with its shareholders Party C, Party D and Party E hereby
jointly agree and confirm that except the stipulation set forth in Article
1 herein, Party B shall seek a guarantee from Party A first if Party B
needs any guarantee for its performance of any contract or loan of working
capital in the course of operation. In this case, Party A shall have the
right but not the obligation to provide appropriate guarantee to Party B on
its own discretion. If Party A decides not to provide such guarantee, Party
A shall issue a written notice to Party B immediately and Party B shall
seek a guarantee from other third party.
5. In the event that any of the agreements between Party A and Party B
terminates or expires, Party A shall have the right but not the obligation
to terminate all agreements between Party A and Party B including without
limitation to Exclusive Technical Consulting and Services Agreement.
6. Any amendment and supplement of this Agreement shall be in a written form.
The amendment and supplement after being duly executed by each Party shall
be part of this Agreement and shall have the same legal effect as this
Agreement.
7. This Agreement shall be governed by and construed in accordance with the
PRC law.
8. Dispute Resolution
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 in
accordance with the current rules of CIETAC. The arbitration proceedings
shall take place in Shanghai and shall be conducted in Chinese. The
arbitration award shall be final and binding upon the parties.
9. Notice
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 facsimile, the notice time is the time when such
notice is transmitted. If such notice does not reach the
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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 from time to time. The writing form includes
facsimile and telex.
10. This Agreement shall be executed by a duly authorized representative of
each party as of the Effective Date first written above and become
effective simultaneously. The term of this agreement is ten years unless
early termination occurs in accordance with the relevant provisions herein.
This Agreement may be renewed only upon Party A's written confirmation
prior to the term of this Agreement expires. The renewed terms shall be
determined by the Parties hereto through mutual agreement.
11. This Agreement shall be terminated on the expiring date unless it is
renewed in accordance with the relevant provision herein. During the valid
term of this Agreement, Party B, Party C ,Party D and Party E shall not
terminate this Agreement. Notwithstanding the above stipulation, Party A
shall have the right to terminate this Agreement at any time by issuing a
thirty days prior written notice to Party B, Party C, Party D and Party E.
12. This Agreement is executed in both Chinese and English in five copies, and
in case of conflicts, the Chinese version shall prevail.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed on their behalf by a duly authorized representative as of the Effective
Date first written above.
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PARTY A: Shanghai Huitong Information Co., Ltd.
Authorized Representative: /s/ Xxx Xx
Name:
Position:
Date:
PARTY B: Shanghai Unilink Computer Co., Ltd.
Authorized Representative: /s/ Xxxxxxx Xxx Xxxx
Name:
Position:
Date:
PARTY C: /s/ Yang Lei
Date:
PARTY D: /s/ Du Minsheng
Date:
PARTY E: Shanghai Weilan Computer Co., Ltd.
Authorized Representative:
Name:
Position:
Date:
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