Operating Agreement - Hurray! Times Communications (Beijing) Ltd., Hurray! Solutions Ltd., Wang Qindai and Xiang Songzuo
Operating Agreement
This Operating Agreement ("Agreement") is entered into on the day of May 5,
2004 among the following parties:
Party A: Hurray! Times Communications (Beijing) Ltd.
Address: Room B 07-A, Tong Heng Plaza, No.4 Huanyuan Road, Haidian District,
Beijing
Party B: Hurray! Solutions Ltd.
Address: Room 318, Floor 3, No.12 Fuxing Road, Haidian District, Beijing
Party C: Wang Qindai
Address: No 50, Dajue Hutong, Xicheng District, Beijing
Party D: Xiang Songzuo
Address: 502, Building 29, Fumin Xincun, Futian District, Shenzhen City,
Guangdong Province
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 limited liability company registered in the PRC and is
approved by competent governmental authorities to carry on the business of
providing information services on the value-added telecommunication
services;
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 85% equity in Party B.
6. Party D is a shareholder of Party B who owns 15% equity in Party B.
7. Party A, Party B, Party C and Party D, 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 and Party D 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 subject to applicable laws. Party B
agrees to mortgage the receivables of its operation and all of the
company's assets which have not been mortgaged to any third party as at the
execution date of this Agreement to Party A as a counter guarantee.
Pursuant to the above guarantee arrangement, Party A, as the guarantor for
Party B and upon request of Party B's counter parties, shall enter into
written guarantee contracts with such parties.
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 and Party D, hereby jointly
agree that Party B shall not conduct any transaction which may materially
affect its assets, obligations, rights or the company's operation without
obtaining 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; and
2.4 To assign to any third party the agreements entered into by it.
3. In order to ensure the performance of the various 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 and Party D
hereby jointly agree to accept the provision of the corporate policies and
guidance by Party A at any 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 and Party D hereby jointly
agree that Party B, Party C and Party D shall appoint the personnel
recommended by Party A as the directors of Party B, and Party B shall
engage Party A's high ranking officers or any other candidate recommended
by Party A as Party B's General Manager, Chief
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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
and Party D shall appoint other high officers of Party A recommended by
Party A to undertake such position.
To ensure performance of such arrangement, Party A and Party B agree to
cause such directors and high ranking officers to enter into director or high
ranking officer engagement agreements with Party B in compliance with the above
arrangement.
Party C and Party D hereby agree to sign an authorization agreement upon
execution of this Agreement, by which Party C and Party D will authorize the
individual employed by Party A to exercise all of their respective voting rights
as a shareholder at Party's shareholder meetings according to laws and articles
of association of the company.
5. Party B together with its shareholders Party C and Party D 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.
6. 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.
7. 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.
8. This Agreement shall be governed by and construed in accordance with the
PRC law.
9. the parties shall strive to settle any dispute arising from the
interpretation or performance 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 Beijing and shall be conducted in Chinese. The
arbitration award shall be final and binding upon the parties.
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10. 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 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.
11. This Agreement shall be executed by a duly authorized representative of
each party as of the 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 term shall be determined
pursuant to Party A's written confirmation.
12. 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 and Party D 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 and Party D.
13. This Agreement is executed in four copies in Chinese.
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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Operating Agreement
(No text on this page)
By: /s/ Xiang Songzuo
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Party A: Hurray! Times Communications (Beijing) Ltd.
Authorized Representative:
Name: Xiang Songzuo
Position:
Date:
By: /s/ Xiang Songzuo
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Party B: Hurray! Solutions Ltd.
Authorized Representative:
Name: Xiang Songzuo
Position:
Date:
By: /s/ Wang Qindai
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Party C: Wang Qindai
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Date:
By: /s/ Xiang Songzuo
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Party D: Xiang Songzuo
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Date:
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