Operating Agreement
Exhibit 99.1
This Operating Agreement (this “Agreement”) is entered into by and among E-Waste Systems Inc, (“EWSI”), Shanghai YaZhuo Jiudian Guanli (“YaZhuo”), and the undersigned shareholders of YaZhuo (collectively the “Shareholders”) as of March , 2013 in Shanghai, the People’s Republic of China (the “PRC” or “China”). EWSI, YaZhuo and the Shareholders are each referred to in this Agreement as a “Party” and collectively as the “Parties”.
RECITALS
a) EWI, a company incorporated in the United States, has the expertise in management of reverse logistic service and technology.
b) YaZhuo is a company incorporated in the PRC, and is engaged in the business development regarding hospitality management, with a focus on the research and development of environmental friendly technologies, goods and services (the “Business”).
c) The undersigned Shareholders of YaZhuo collectively own 100% of the equity interest of YaZhuo (the “Equity Interest”).
d) EWSI has entered into a Management Services Agreement with YaZhuo (the “Management Services Agreement”) to provide Management and other relevant services relating to the Business to YaZhuo.
e) Pursuant to the Management Services Agreement with EWSI and YaZhuo dated of even date herewith, YaZhuo is obligated to make regular payment of Management services fee to EWSI during the term of the Management Services Agreement. YaZhuo’s daily operation has a material influence on its ability to make such payment to EWSI.
NOW, THEREFORE, the Parties to this Agreement hereby agree as follows through negotiation to clarify certain matters in connection with YaZhuo’s operations:
1. EWSI agrees, subject to YaZhuo’s agreement to relevant provisions of this Agreement, to be YaZhuo’s guarantor in connection with the contracts, agreements and transactions executed between YaZhuo and any other third party, and to provide full guarantee for the performance of such contracts, agreements of transactions by YaZhuo. YaZhuo agrees, as a counter-guarantee, to pledge all of its relevant assets, including accounts receivable, to EWSI. Pursuant to such guarantee arrangement, EWSI wishes to enter into written guarantee agreements with YaZhuo’s counter-parties thereof, to assume the guarantee liability as the guarantor when applicable. As such, EWSI and the Shareholders shall take all necessary actions (including but not limited to, executing relevant documents and proceeding with relevant registrations) to carry out the counter-guarantee arrangements provided by EWSI thereof.
2. In consideration of Clause 1 herein and to assure the performance of the various arrangements between EWSI and YaZhuo, and the payment of the accounts payable by YaZhuo to EWSI, YaZhuo and the Shareholders thereby jointly agree that YaZhuo shall not, without the prior written consent of EWSI, conduct any transaction which may materially affect the assets, obligations, rights or the operations of YaZhuo (excluding proceeding with YaZhuo’s normal business operation and the lien obtained by relevant counter parties due to such agreements). Such transactions shall include, without limitation, the following:
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2.1 To borrow money from any third party or assume any debt;
2.2 To sell or acquire from any third party any asset or right, including but not limited to any intellectual property rights;
2.3 To provide any guarantee to any third party using its assets or intellectual property rights; or
2.4 To assign to any third party its business agreements.
3. In order to ensure the performance of the various operation agreements between EWSI and YaZhuo and the payments of various accounts payable by YaZhuo to EWSI, YaZhuo and the Shareholders hereby jointly agree to accept the corporate policies provided by EWSI in connection with YaZhuo’s daily operations, financial management and the employment and dismissal of YaZhuo’s employees.
4. YaZhuo and the Shareholders hereby jointly agree that the Shareholders shall appoint the members recommended by EWSI as the Directors of YaZhuo, and shall appoint members of EWSI’s senior management as YaZhuo’s CEO and President, Chief Financial Officer, and other senior officers. If any member of such senior management leaves or is dismissed by EWSI, he or she will lose the qualification to take any position with YaZhuo, and YaZhuo shall appoint another member of EWSI’s senior management to take such position, as recommended by EWSI. The person recommended by EWSI in accordance with this section shall have the qualifications of a Director, General Manager, Chief Financial Officer, and/or other relevant senior officers pursuant to applicable laws.
5. YaZhuo, together with the Shareholders, hereby jointly agree and confirm that YaZhuo shall first seek guarantee from EWSI if YaZhuo requires any guarantee for its performance of any contract or loan in the course of its business operation. Under such circumstances, EWSI shall have the right, but not the obligation, to provide the appropriate guarantee to YaZhuo at its sole discretion. If EWSI decides not to provide such guarantee, EWSI shall issue a written notice to YaZhuo immediately and YaZhuo shall seek a guarantee from other third party.
6. In the event that any of the agreements between EWSI and YaZhuo terminates or expires, EWSI shall have the right, but not the obligation, to terminate any or all of the agreements between EWSI and YaZhuo, including but not limited to, this Agreement and the Management Services Agreement.
7. Any amendment to this Agreement shall be made in writing. The amendments duly executed by all Parties shall be deemed as an integral part of this Agreement.
8. If any provision of this Agreement is held to be invalid, illegal, unenforceable or in conflict with the laws and regulations of the jurisdictions, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
9. YaZhuo and the Shareholders shall not assign any right or obligation under this Agreement to any third party without the prior written consent of EWSI. YaZhuo and the Shareholders hereby agree that EWSI may assign its rights and obligations under this Agreement if necessary and such transfer shall only be subject to a written notice sent to YaZhuo and the Shareholders by EWSI, and no any further consent from YaZhuo or the Shareholders will be required.
10. The Parties of this Agreement shall acknowledge and ensure the confidentiality of all oral and written materials exchanged relating to this Agreement. No Party shall disclose the confidential information to any other third party without the other Party’s prior written approval, unless: (a) it is already in the public domain at the time when it is communicated (unless it enters the public domain without the authorization of the disclosing Party); (b) the disclosure is in response to the relevant laws, regulations, or stock exchange rules; or (c) the disclosure is required by any of the Party’s legal counsel or financial consultant for the
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purpose of the transaction of this Agreement. However, such legal counsel and/or financial consultant shall also comply with the confidentiality as stated hereof. The disclosure of confidential information by employees of hired institutions of the disclosing Party is deemed to be an act of the disclosing Party, and such disclosing Party shall bear all liabilities of the breach of confidentiality.
11. If any provision of this Agreement is found by a proper authority to be unenforceable or invalid such unenforceable or invalidity shall not render this Agreement unenforceable or invalid as a whole.
12. Notice or other communications required to be given by any Party pursuant to this Agreement shall be written in English and Chinese and delivered personally or sent by registered mail or by a recognized courier service or by facsimile transmission to the address of the relevant Party set forth below. The date when the notice is deemed to be duly served shall be determined as the follows: (a) a notice delivered personally is deemed duly served upon the delivery; (b) a notice sent by mail is deemed duly served the third (3rd) day after the date; and (c) a notice sent by facsimile transmission is deemed duly served upon the time shown on the transmission confirmation of relevant documents.
To EWSI
Address: 000 Xxxxx Xxxxxx #000, Xxx Xxxxx, XX XXX 00000
Attn: Xxxxx Xxxxxxx, Secretary Treasurer
Fax: x0 000 000 0000
Tel: x0 000 000 0000
To YaZhuo
Address: Xxxx 000, Xx. 000 Xxxx’an Road, Xuhui District, Shanghai, PRC
Attn:Xxxxx Xxxx
Fax:
Tel: x00 0000 0000
To the Shareholders
Address: Xxxx 000, Xx. 000 Xxxx’an Road, Xuhui District, Shanghai, PRC
Attn: Xxxxx Xxxx
Fax:
Tel: x00 0000 0000
13. This Agreement shall be governed and construed in accordance with the US law.
14. The Parties agree that in the event a dispute shall arise from this Agreement, the Parties shall settle their dispute through amicable negotiations and/or arbitration in accordance with this Clause 14. If the Parties fail to reach a settlement within forty-five (45) days following the negotiations, the dispute shall be submitted to be determined through arbitration by If the Parties fail to reach a settlement within forty-five (45) days following the negotiations, the dispute shall be submitted to be determined through arbitration in accordance with section 13 of the Consulting Services Agreement by and between the parties of even date herewith. For avoidance of doubt, YaZhuo, who may or may not select arbitrator, shall be bound by the decision rendered through such arbitration.
15. This Agreement has been executed by each Party or its duly authorized representative on the date first written above and shall become effective simultaneously.
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16. The Parties confirm that this Agreement shall constitute the entire agreement of the Parties with respect to the subject matters herein and shall supersede and replace all prior verbal and written agreements and understandings among the Parties.
17. The term of this Agreement shall commerce from the execution date and shall last for the maximum period of time permitted by law unless early terminated in accordance with the relevant provisions herein or by any other agreements reached by all Parties. Within the term of the Agreement, if EWSI shall terminate this Agreement (including any extension of such term) or if this Agreement shall terminate due to any other reason, this Agreement shall be terminated upon the termination of such Party, unless such Party has already assigned its rights and obligations in accordance with Clause 9 hereof.
18. This Agreement shall be terminated on the expiration date unless it is renewed in accordance with the relevant provisions herein.
19. During the effective term of this Agreement, YaZhuo and the Shareholders shall not terminate this Agreement. Notwithstanding the above stipulation, EWSI shall have the right to terminate this Agreement at any time by giving a thirty (30)-day prior written notice to YaZhuo and the Shareholders.
20. This Agreement has been executed in six (6) originals in English and all originals shall be equally valid.
Each Party shall retain one (1) original.
[No Text Below]
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[Signature Page]
IN WITNESS THEREOF this Agreement is duly executed by each Party or its legal representatives on the date first set forth above.
E-Waste Systems Inc. (“EWSI”)
/s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: CEO
Shanghai YaZhuo Jiudian Guanli (“YaZhuo”)
/s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: CEO and President
[Signature of Shareholders of YaZhuo]
(Signature)
/s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
ID Card No.:
Owns 100% of the Equity Interest of YaZhuo
Signature page to Operating Agreement
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