Exhibit 10.2
OPERATING AGREEMENT
This Operating Agreement (this "Agreement") is dated November 1, 2005, and is
entered into in Zhejiang, China between Capital Future Development Limited,
incorporated under law of British Virgin Islands ("Party A"), Zhejiang Yong Xin
Digital Technology Co., Ltd., duly established under law of People's Republic of
China, with a registered address at Xx. 000 Xx Xxx Xxx Xx, Xxxx Ye District,
Hangzhou, China("Party B"), , and shareholders holding 100% outstanding shares
of Party B (the "Shareholders of Party B" or "Party C"). Party A and Party B,
and Shareholders of Party B are referred to collectively in this Agreement as
the "Parties."
RECITALS
1. Party A, a company duly incorporated under law of British Islands, has the
expertise in the business of digital products;
2. Party B is a limited company incorporated in China, and is engaged in the
selling, circulation and modern logistics of 3C products (communication
products, information technology ("IT") products and digital products) in
China (the "Business");
3. The undersigned Shareholders of Party B collectively own over 100% of the
equity interests of Party B;
4. Party A has established a business relationship with Party B by entering
into the "Consulting Services Agreement" (hereinafter referred to as the
"Services Agreement");
5. Pursuant to the above-mentioned agreement between Party A and Party B,
Party B shall pay a certain amount of money to Party A. However, the
relevant payable account has not been paid yet and the daily operation of
Party B will have a material effect on its capacity to pay such payable
account to Party A;
6. The Parties are entering into this Agreement to clarify matters in
connection with Party B's operations.
NOW THEREFORE, all parties of this Agreement hereby agree as follows through
mutual negotiations:
1. [Party A agrees, subject to the satisfaction of the relevant provisions by
Party B herein, as the guarantor for Party B in the contracts, agreements
or transactions in connection with Party B's operation between Party B and
any other third party, to provide full guarantee for the performance of
such contracts, agreements or transactions by Party B. Party B agrees, as
the counter-guarantee, to pledge all of its assets, including accounts
receivable, to Party A. According to the aforesaid guarantee arrangement,
Party A wishes to enter into written guarantee contracts with Party B's
counter-parties thereof to assume the guarantee liability as the guarantor
when it needs; therefore, Party B and Party C shall take all necessary
actions (including but not limited to execute relevant documents and
transact relevant registrations) to carry out the arrangement of
counter-guarantee to Party A.]
2. In consideration of the requirement of Article 1 herein and assuring the
performance of the various operation agreements between Party A and Party B
and the payment of the payables accounts by Party B to Party A, Party B
together with its shareholders Party C hereby jointly agree that Party B
shall not conduct any transaction which may materially affects its assets,
obligations, rights or the operations of Party B (excluding the business
contracts, agreements, sell or purchase assets during Party B's regular
operation and the lien obtained by relevant counter parties due to such
agreements) unless the obtainment of a prior written consent from Party A,
including but not limited to the following:
2.1 To borrow money from any third party or assume any debt;
2.2 To sell to or acquire from any third party any asset or right,
including but not limited to any 2 intellectual property right;
2.3 To provide any guarantees to any third parties using its assets or
intellectual property rights;
2.4 To assign to any third party its business agreements.
3. In order to ensure the performance of the various operation agreements
between Party A and Party B and the payment of the various payables by
Party B to Party A, Party B together with its shareholders Party C hereby
jointly agree to accept, from time to time, advice regarding corporate
policy advise provided by Party A in connection with company's daily
operations, financial management and the employment and dismissal of the
company's employees.
4. Party B together with its shareholders Party C hereby jointly agree that
Party C shall appoint the person recommended by Party A as the directors of
Party B, and Party B shall appoint Party A's senior managers as Party B's
General Manager, Chief Financial Officer, and other senior officers. If any
of the above senior officers leaves or is dismissed by Party A, he or she
will lose the qualification to take any position in Party B and Party B
shall appoint other senior officers of Party A recommended by Party A to
take such position. The person recommended by Party A in accordance with
this Article herein should comply with the stipulation on the
qualifications of directors, General Manager, Chief Financial Officer, and
other senior officers pursuant to applicable law.
5. Party B together with its shareholders Party C hereby jointly agree and
confirm that Party B shall seek the guarantee from Party A first if it
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needs any guarantee for its performance of any contract or loan of flow
capital in the course of operation. In such case, Party A shall have the
right but not the obligation to provide the 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 but not
limited to the Services Agreement.
7. Any amendment and supplement of this Agreement shall be made in writing.
The amendment and supplement duly executed by all parties shall be deemed
as a part of this Agreement and shall have the same legal effect as this
Agreement.
8. If any clause hereof is judged as invalid or non-enforceable according to
relevant laws, such clause shall be deemed invalid only within the
applicable area of the Laws and without affecting other clauses hereof in
any way.
9. Party B shall not assign its rights and obligations under this Agreement to
any third party without the prior written consent of Party A. Party B
hereby agrees that Party A may assign its rights and obligations under this
Agreement as it needs and such transfer shall only be subject to a written
notice sent to Party B by Party A, and no any further consent from Party B
will be required.
10. All parties acknowledge and confirm that any oral or written materials
communicated pursuant to this Agreement are confidential documents. All
parties shall keep secret of all such documents and not disclose any such
documents to any third party without prior written consent from other
parties unless under the following conditions: (a) such documents are known
or shall be known by the public (excluding the receiving party discloses
such documents to the public without authorization); (b) any documents
disclosed in accordance with applicable laws or rules or regulations of
stock exchange; (c) any documents required to be disclosed by any party to
its legal counsel or financial consultant for the purpose of the
transaction of this Agreement by any party, and such legal counsel or
financial consultant shall also comply with the confidentiality as stated
hereof. Any disclosure by employees or agencies employed by any party shall
be deemed the disclosure of such party and such party shall assume the
liabilities for its breach of contract pursuant to this Agreement. This
Article shall survive whatever this Agreement is void, amended, cancelled,
terminated or unable to perform.
11. This Agreement shall be governed by and construed in accordance with PRC
law.
12. The parties shall strive to settle any dispute arising from the
interpretation or performance of 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 its
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rules of CIETAC. The arbitration proceedings shall take place in Beijing
and shall be conducted in Chinese. Any resulting arbitration award shall be
final and conclusive and binding upon all the parties.
13. This Agreement shall be executed by a duly authorized representative of
each party as of the date first written above and become effective
simultaneously.
14. Notwithstanding Article 13 hereof, the parties confirm that this Agreement
shall constitute the entire agreement of the Parties with respect to the
subject matters therein and supersedes and replaces all prior or
contemporaneous verbal and written agreements and understandings.
15. The term of this agreement is ten (10) years unless early termination
occurs in accordance with relevant provisions herein or in any other
relevant agreements reached by all parties. This Agreement may be extended
only upon Party A's written confirmation prior to the expiration of this
Agreement and the extended term shall be determined by the Parties hereto
through mutual consultation. During the aforesaid term, if Party A or Party
B is terminated at expiration of the operation term (including any
extension of such term) or by any other reason, this Agreement shall be
terminated upon such termination of such party, unless such party has
already assigned its rights and obligations in accordance with Article 9
hereof.
16. This Agreement shall be terminated on the expiration date unless it is
renewed in accordance with the relevant provision herein. During the valid
term of this Agreement, Party B 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 (30) days prior
written notice to Party B.
17. This Agreement has been executed in four (4) duplicate originals in
English, each Party has received one (1) duplicate original, and all
originals shall be equally valid.
[SIGNATURE PAGE FOLLOWS]
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[Signature Page]
IN WITNESS WHEREOF each party hereto has caused this Agreement duly executed by
itself or a duly authorized representative on its behalf as of the date first
written above.
PARTY A: Capital Future Development Limited
Capital Future Development Limited
Legal/Authorized Representative: /s/
----------------------------
Name:
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Title:
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PARTY B: Zhejiang Yong Xin Digital Technology Co., Ltd.
Legal/Authorized Representative: /s/
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Name:
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Title:
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SIGNATURE PAGE FOR SHAREHOLDERS OF PARTY B
SHAREHOLDERS OF PARTY B:
/s/ WANG Zhenggang
---------------------------------
By: WANG Zhenggang;
(PRC ID Card No.: 330725196811015038);
Shares of. Zhejiang Yong Xin Digital Technology Co., Ltd. owned
by WANG Zhenggang: 35%;
Home Address: Xx0, Xxxxx xxxxx 0, Xxx Xxx Xxx, Xxxx, Xxxxxxxx, Xxxxx;
/s/ Xxxxx Xxxxx
---------------------------------
By: Xxxxx Xxxxx
(PRC ID Card No.: 420106196706282812)
Shares of Zhejiang Yong Xin Digital Technology Co., Ltd owned by
XXXXX Xxxxx: 20%;
Home Address: No 13 Block 00 Xxxxxxxx Xx Xxxx, Xxxx Xxxxx Xxxxxx,
Xxxx, Xxxxxxxx, Xxxxx
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/s/ LV Huiyi
---------------------------------
By: LV Huiyi
(PRC ID Card No.: (pound)(0)000000000000000000)
Shares of Zhejiang Yong Xin Digital Technology Co., Ltd owned by
XXXXX Xxxxx: 20%;
Home Address: Xxxxx 000, Xx.00, 000 Xxxxx Xxxx Xxxx Road, Guangdong,
China
/s/ XXXX Xxxxxxxx
---------------------------------
By: XXXX Xxxxxxxx
(PRC ID Card No.: 330723780207004)
Shares of Zhejiang Yong Xin Digital Technology Co., Ltd owned by
XXXXX Xxxxx: 15%;
Home Address: Xx. 00, Xxxxxx Xxxx, Xxxxxx Xxxx, Xxxx Xxxxxxxx,
Xxxxxxxx, Xxxxx
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/s/ BAO Zhongsheng
---------------------------------
By: BAO Zhongsheng
(PRC ID Card No.: 330725197805030818)
Shares of Zhejiang Yong Xin Digital Technology Co., Ltd owned by
XXXXX Xxxxx: 10%;
Home Address: No 13 Block 00 Xxxxxxxx Xx Xxxx, Xxxx Xxxxx Xxxxxx,
Xxxx, Xxxxxxxxxx
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